Fiat reports profit plunge but holds full-year forecast

July 30, 2014 - 2:29:19 pm

MILAN: Italian car maker Fiat, which is merging with US group Chrysler, said net profit more than halved in the second quarter, undermined by a higher tax charge in the United States.

Net profit in the first three months of 2014 was 197 million euros ($264 million), down 54.7 percent from the equivalent figure last year.

Operating profit fell by 10.4 percent to 961 million euros, even though sales rose by 5.0 percent to 23.3 billion euros.

The news sents Fiat shares down 1.51 percent in Milan, while the broader index was largely flat.

The group said it had reduced net debt by 300 million euros in the quarter to 9.7 billion euros.

But despite the profits plunge, Fiat held to its forecasts for the year.

It is targeting net profit of 600-800 million euros and sales of 93 billion euros.

It expects operating profit to turn out at 3.6-4.0 billion euros, and debt to be 9.8-10.3 billion euros.

Fiat, which took full control of Chrysler in January, has called a shareholders' meeting for Friday to approve a full merger of the two groups.

The new entity would be called Fiat Chrysler Automobiles (FCA). (AFP)