ITALIAN automaker Fiat yesterday cut its 2013 financial targets as expected, after third-quarter revenue in Latin America fell because incentives expired in Brazil.
Fiat now expects to earn a trading profit of between €3.5bn and €3.8bn (£3.2bn) in 2013, the bottom end falling below an analyst forecast range of €3.65bn to €3.92bn.
Fiat said its group trading profit for the third quarter was €816m, lower than analyst forecasts of €915m. Analysts were expecting a poor performance in Brazil, which usually accounts for about a quarter of Fiat’s trading profit, because of the strong euro and the end of car sales incentives, but were surprised by the extent of the cut in guidance.
Fiat’s net loss in Europe – where mass-market carmakers are struggling with the lowest sales in 20 years – narrowed to €165m from €238m a year earlier. Chrysler, meanwhile, posted a 22 per cent rise in net profit to $464m.
Both Fiat and Chrysler are being watched by analysts as an indication of the value Chrysler could fetch should its minority shareholder press ahead with an initial public offering (IPO) of some of its shares.
Fiat wants to buy the 41.5 per cent stake in Chrysler owned by a union-affiliated healthcare trust, but the two have so far failed to reach an agreement on price.
City A.M. Reporter