News Column

Fiat earnings fall short, but Chrysler's 2013 profit rose to $1.8 billion

January 29, 2014

By Brent Snavely, Detroit Free Press

Jan. 29 --Fiat profits fell in 2013 as its troubled European operations and a slowing South American car market offset the positive impact of Chrysler's increased profit. Fiat also said it will not pay a dividend for 2013 and cut its guidance for 2014. The Italian automaker, which now owns all of Chrysler, reported today that it earned $943 million euros ( $1.3 billion ), in 2013, down from 1.14 billion euros ( $1.56 billion ) in 2012. Without Chrysler, Fiat would have lost 441 euros ( $603 million ) in 2013. Still, Fiat CEO Sergio Marchionne , in an employee memo to Chrysler employees, said workers would either receive a profit-sharing check or performance bonuses. The Italian automaker said it expects to earn a trading profit of 3.6 billion to 4.0 billion euros this year, down from a range of 4.7 billion to 5.2 billion euros the company forecast in October 2012 . In South America , Fiat's profit plummeted more than 50% to 492 million euros ( $672.9 million ) in 2013, from 1 billion euro , or $1.4 billion , the prior year. Fiat's shares have declined more than 6% today on the Milan Stock Exchange to 7.07 euros . Chrysler, meanwhile, said its earnings totaled $1.8 billion for 2013, up from $1.7 billion in 2012 as the U.S. auto industry continued its four-year recovery. The Auburn Hills automaker's results would have been better except for higher than expected costs related to the launch of new products, especially the 2014 Jeep Cherokee. Chrysler earned a profit of $659 million during the fourth quarter, up from $378 million for the same period in 2012. "The 2013 year-end financial results reflect the commitment Chrysler Group has made to rapidly refresh our product lineup with vehicles that achieve exacting performance standards," Marchionne said in a statement. Chrysler said its 2013 revenue exceeded $72 billion , up 10% from the prior year. Fourth-quarter revenue was $21 billion , up 24% from a year earlier. Despite challenges, Marchionne told employees to expect a brighter future now that the two companies are fully combined. Fiat, which became Chrysler's controlling shareholder in 2009, now owns all of Chrysler. Today, Fiat's board of directors is expected to announce a new name for the combined companies, as well as the primary stock exchange that the company's stock listing. "Our future is bright if all of us in this combined group continue to embrace common values including meritocracy, accountability and the willingness to embrace competition," Marchionne wrote in the memo. Contact Brent Snavely : 313-222-6512 or bsnavely@freepress.com . Follow him on Twitter @BrentSnavely. ___ (c)2014 Detroit Free Press Visit the Detroit Free Press at www.freep.com Distributed by MCT Information Services


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Source: Detroit Free Press (MI)


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