Following Consolidation of Chrysler Financials, Fiat Raises 2011 Profit Projections

After consolidating Chrysler Group LLC into its earnings, Fiat SpA has raised its full-year earnings forecast.

In a statement issued on Tuesday, the Italian automaker and majority stakeholder in Chrysler now forecasts its 2011 earnings to reach about 2.1 billion euros ($3 billion) on total revenue of more than 58 billion euros.  The company previously forecast earnings to reach as much as 1.2 billion euros and yearly sales of 37 billion euros.

Fiat’s second-quarter profit surged 71 percent to 525 million euros, up from 307 million euros in the second quarter of 2010. Bloomberg’s survey average of nine analysts had estimated profits of 494 million euros.

Fiat-Chrysler CEO Sergio Marchionne plans to merge the management structure of the two companies following Fiat’s acquisition of a controlling 53.5 percent of Chrysler last week. Fiat’s current earnings include revenue from Chrysler since June 1.

By merging Fiat and Chrysler’s management structure, Marchionne hopes to reduce operating costs and generate annual revenue of more than 100 billion euros by 2014. The exact timing of the merger has not yet been decided, however, Marchionne said he doubted that it would be completed this year.

Goldman Sachs analyst Stefan Burgstaller has rated Fiat stock as a “buy.” In a note to investors last week Burgstaller said, “We believe Fiat offers a unique combination of structural and operational value creation.” He went on to say, “Successful execution of the five- year plan offers further operational upside.”

For the second quarter, Chrysler posted adjusted net income of $181 million. During the second quarter of 2010, the automaker posted losses of $172 million.

By year’s end, Fiat is expected to control 58.5 percent of Chrysler, up from the initial 20 percent stake granted by the U.S. government as part of Chrysler’s reorganization settlement in 2009.

Fiat SpA, which lost about 1 billion euros in the European market last year, is looking to Brazil to counter its losses in its home market. Marchionne referred to Brazil as “the Cinderella story” after sales in that country grew by 4.9 percent during the first half of the year. Earlier this month the Brazilian car manufacturer’s association, Anfavea, reported that Fiat controlled 22.4 percent of the market.

Please click the following link for more automotive industry news.


Posted in In the News

Search for a vehicle

About Us  |    Contact Us  |    Terms of Use  |    Privacy Policy  |    Auto Dealer Marketing  |    Site Map

©2016,, LLC All rights reserved.