DETROIT — The financial picture improved significantly for Fiat Chrysler Automobiles in the third quarter of 2020, with the company’s best showing since the coronavirus pandemic blew a hole in sales and earnings across the automotive industry earlier this year.
Rather than a loss on the quarter, the company claimed a net profit of $1.4 billion (1.2 billion euros), up 773% over the same quarter in 2019, powered by its performance in North America.
The company cited “continued strong consumer demand for Ram and Jeep vehicles, coupled with a disciplined approach on incentives and operational costs” as well as lower advertising costs for its $2.96 billion (2.5 billion euros) in adjusted earnings before interest and taxes in North America.
While net revenues were down 6% at $30.1 billion (25.8 billion euros) across the company, FCA reported earnings before interest and taxes of $2.7 billion (2.3 billion euros), up 16% over the same period last year. It reported adjusted diluted earnings per share of $1.15 (0.97 euros), which was up 20%.
FCA’s worldwide vehicle shipments were down 3% at more than 1 million units, but it cited a strong retail mix. Retail sales tend to be more profitable than fleet sales.
“Our record results were driven by our team’s tremendous performance in North America. During the quarter, we unveiled ‘white-space’ products across many brands; launched the next chapter for our storied Maserati brand; confirmed our market leadership in Latin America; and continued the rapid pace of our global investments in electrification. Once again, our team has proven its extraordinary resilience and creativity, and, as we close in on the merger to create Stellantis, we are stronger and more focused than ever on our mission to deliver great value for all our stakeholders,” according to FCA CEO Mike Manley.
The company said it is on track to complete its merger with Peugeot-maker PSA Group at the end of the first quarter next year. Stellantis is to be the name of the merged company.
FCA also reinstated its 2020 fiscal year guidance with adjusted earnings before interest and taxes of $3.6 billion to $4.1 billion (3-3.5 billion euros), assuming no further significant disruptions from COVID-19, and the company noted that global operations had returned to near pre-COVID-19 production levels. However, media reports recently have highlighted significant spikes in cases in numerous European countries, including resistance to possible lockdown measures, and the case counts are up in many parts of the United States and Canada as well.
Manley has said the pandemic represents the biggest risk the industry has ever faced.
Manley had predicted a much better second half, and the third quarter results showed the company is headed in that direction.
Fiat Chrysler had reported a loss of $1.24 billion (1.05 billion euros) in the second quarter and $1.9 billion (1.7 billion euros) in the first quarter.
The earnings trend was similar to the sales picture this year, with U.S. sales down 10% in the third quarter after being down 39% in the second compared with the same periods in 2019.
©2020 Detroit Free Press