ZCZC
BCN-05
ITALY-US-AUTOMOBILE-EARNINGS-FIATCHRYSLER
Fiat Chrysler shares soar after CEO hints at tie-ups
MILAN, May 4, 2019 (BSS/AFP) – Fiat Chrysler (FCA) reported falling
profits on Friday, but its share price soared after its CEO indicated that
the Italian-US group would have an “active and constructive role” in
consolidating the automotive sector.
The world’s seventh-largest carmaker reported that its first-quarter net
earnings were chopped nearly in half in the first three months of 2019 as
sales slid, but maintained it would still meet its annual target of a stable
operating profit.
The group’s share price briefly dove before surging by more than five
percent to 14.26 euros ($16.10) as of 1500 GMT.
In an analyst call after the earnings were released, chief executive Mike
Manley indicated that the carmaker was open to potential alliances.
“I honestly believe that in the next two three years there will be very
significant opportunities in this area and when I think about the development
of our business around the world, from my point of view, FCA will be playing
an active and constructive role,” he said.
“We made clear in the past that we want to be active and proactive to
develop our business and improve the value for our shareholders,” he added.
“We are going to an environment where there will be opportunities.”
Rumours of potential mergers involving Fiat Chrysler have swirled in
recent months.
French carmaker PSA, which owns the Peugeot, Citroen and Opel brands,
showed interest in a possible tie-up with FCA in early March.
And later that month the Financial Times reported that follow French
automaker Renault was eyeing a merger with Fiat Chrysler.
MORE/HR/0928
ZCZC
BCN-06
ITALY-US-AUTOMOBILE-EARNINGS-FIATCHRYSLER 2 LAST MILAN
-‘Bad news was priced in’ –
The automaker reported that its first-quarter net profit came in at 508
million euros ($566 million), a drop of nearly 47 percent from the same
period last year.
Including car parts maker Magneti Marelli, which Fiat Chrysler just sold
to Japan’s Calsonic Kansei, net profits came in at 619 million euros, still
far below the 778 million euros expected by an analyst consensus calculated
by Factset Estimates.
Sales by the company which makes Fiat, Chrysler, Jeep, Maserati, Alfa
Romeo, Dodge and Ram vehicles, slid 4.8 percent to 24.5 billion euros.
The number of vehicles shipped fell by 14 percent, which the company said
was partially the result of an exceptional performance last year selling both
new and old versions of the Jeep Wrangler.
Shipments fell in the Asia-Pacific region by 30 percent, mainly from a
decline in China, and by 14 percent in North America, the group’s largest
market.
Manley, who took over from legendary boss Sergio Marchionne after his
death last year, gave investors a heads up last month to disappointing first
quarter results.
However he expressed confidence Fiat Chrysler would meet its 2019 targets,
which were reconfirmed Friday with a stable operating profit of 6.7 billion
euros and a 10 percent decline of earnings per share.
“The figures were poor, but seeing as the company lowered its forecast
three months ago, it seems a lot of the bad news was priced in,” CMC Markets
analyst David Madden told AFP.
“It is worrying that the company had a poor performance in North America –
– its largest market.
“The cooling of China and the economic uncertainty in Europe could not
have come at a worse time for the firm.”
European car manufacturers are looking to consolidate the market as sales
fall ahead of the EU imposing new strict emissions limits.
BSS/AFP/HR/0930