The Italian automaker Fiat, which controls Chrysler, yesterday reported a return to second-quarter profits on improved sales of agriculture equipment and trucks and said it may raise its forecasts for this year.
Fiat also said its board approved the plan to separate its industrial vehicle and auto businesses into two distinct companies in order to “give birth” to a global automotive company that will incorporate Chrysler LCC. The plan was announced in April.
A second-quarter net profit of 90 million euros (US$115.7 million) compares with a loss of 168 million euros in the same period last year.
Net revenues were up 12.5 percent to 14.8 billion euros.
The report sent shares in the company 6 percent higher to 9.60 euros on the Milan Stock Exchange, after being temporarily suspended earlier for excessive gains.
Fiat sells cars under the Fiat, Lancia and Alfa Romeo brands, as well as trucks, farm and construction equipment.
Revenues at CNH construction and agriculture rose 16 percent to 3.3 billion euros as higher sales in North and South America helped offset weak markets in Europe, Australia and the former Soviet Union, Fiat said.
Iveco trucks saw revenues soar 18.3 percent to 2.1 billion euros with deliveries up 32 percent to 34,318 vehicles amid early signs of recovery in the sector.
Fiat said in a release that recovery in the light commercial vehicle business offset a drop in passenger car sales, particularly in Italy and Germany, after eco-incentive programs in Europe were ended. In all, Fiat Group Autos reported revenues of 7.4 billion euros, up 6.4 percent.
Fiat this quarter launched the Alfa Romeo Giulietta, a key model for the survival of its Alfa Romeo brand, which celebrates its 100th anniversary this year and is preparing to be launched in the US.
It also has been working to squeeze performance out of its engines and this month presented the Fiat 500 with a new two-cylinder TwinAir engine using the automaker’s MultiAir technology.
Fiat confirmed its targets for this year, including break-even net profit, trading profit of between 1.1 billion euros and 1.2 billion euros and revenues exceeding 50 billion euros, but said it was likely to revise the forecasts upward based on next quarter’s earnings.
Fiat, meanwhile, is proceeding with the spin-off of the industrial side to create Fiat Industries SpA, comprising CNH agriculture and construction equipment, Iveco and FPT Industries and Marine activities.
Fiat SpA will include Fiat Group Autos, which includes the Fiat, Alfa and Lancia brands, Maserati and 85 percent of Ferrari, as well as components businesses and other related assets.
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