Fiat earned a profit of 358 million euro or $440 million during the second quarter because of profits from Chrysler.
Without Chrysler, Fiat would have lost 246 million euros or $302 million. Fiat's shares hit a low of 3.92 euros Tuesday on the Milan Stock Exchange after closing Monday at 4.19 euros.
The Italian automaker said Chrysler generated a profit of 604 million euros or $742.9 million under the European accounting system.
On Monday, Chrysler reported a $436-million profit in the same period under U.S. accounting standards.
CEO Sergio Marchionne today said the new Dodge Dart and updated Ram 1500 pickup will help Chrysler's earn a profit of more than $1.5 billion this year and sell more than 2.4 million cars and trucks.
"None of this would have been possible without the extraordinary dedication of a lot of people who have committed themselves to the revival of Chrysler," Marchionne said.
But for the combined companies, the total net income was less than a quarter of the $1.24 billion euro, or $1.52 billion it earned for the second quarter last year.
In Europe industry sales are declining for the fifth year in a row. The crisis is hitting southern Europe-based automakers such as Fiat. especially hard.
Ford said last Wednesday it expects to lose $1 billion in Europe this year and General Motors, which has shuffled its management team in Europe, is expected to report a loss for its European operations on Thursday.
But no matter how bad Fiat's situation gets in Europe, Marchionne said the Italian automaker can't and won't use Chrysler's growing cash. Terms of the restructuring agreement under Chrysler's 2009 bankruptcy, prohibits Fiat from transferring cash from Chrysler.
"Firewalls are up, can't get to it," Marchionne told analysts today during a conference call.
Marchionne wants to merge the two companies into a global automaker that can sell six million cars and trucks annually by 2014.
During the first half of the year Fiat and Chrysler have shipped 2.1 million cars and trucks.
Despite Fiat's trouble in Europe, Fiat left its outlook for the combined companies unchanged.
The combined companies expect total revenue for the year to exceed $77 billion euro, or $94.6 billion, with a profit of more than 5.5 billion euro, or $6.75 billion.
Fiat owns 58.5% of Chrysler and notified the UAW Retiree Medical Benefits Trust earlier this month that it wants to exercise an option to purchase an additional 3.3% of Chrysler shares. That would increase Fiat's stake to 61.8% of Chrysler. The trust currently owns 41.5% of Chrysler.
On Monday, Marchionne praised Chrysler employees for the progress that the company, which emerged from Chapter 11 bankruptcy in 2009, has made.
"We have learned that we can accomplish great things when we marshal all of our talent and commitment to work for a common goal," Marchionne said in the email, obtained by the Free Press.
