Fiat Chrysler Automobiles NV said first-quarter profit jumped 22 per cent, backed by a resurgent European market, U.S. demand for Ram pickups, Jeep SUVs and offcourse a strong dollar.
Earnings before interest and taxes excluding one-time items rose to €800-million ($880-million), the London-based company said Wednesday in a statement. Revenue increased 19 per cent to €26.4-billion.
Chief Executive Officer Sergio Marchionne is pushing the auto industry to consolidate as a way to increase profitability. Other auto makers have yet to take the cue, as booming sales in the U.S. and Europe are easing pressure to restructure. Marchionne will provide his view on “industry capital optimization” later today on a conference call with analysts.
The company’s European business was profitable for the second consecutive quarter while losses widened in Latin America. Profit in North America jumped to €601-million from €380-million a year earlier.
Fiat Chrysler has relied on North American operations, where sales have risen for 60 straight months, to overcome weakness in Europe, where it made money in the fourth quarter for the first time since 2007.
The dollar’s gain versus the euro enhances the margin coming from U.S.-made SUVs and trucks when the company converts those earnings into euros. The euro tumbled 21 per cent against the dollar in the 12 months through April 27. Still, profit margins in the region remains “far below” General Motors Co. and Ford Motor Co., said Max Warburton, an analyst with Sanford C. Bernstein.
Fiat Chrysler was trading down 0.5 per cent at 14.77 euros as of 2:03 p.m. in Milan, paring back from a drop of as much as 2.2 percent earlier in the day.