Fiat SpA has reported a fourth-quarter loss because of the unprofitable car-making unit, according to Bloomberg News, which noted that the company controlled by the Agnelli family has forecast higher operating earnings in 2005.
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Bloomberg said the net loss was €374 million ($US496 million) compared with a loss of €1.1 billion a year earlier. Sales fell 1.2% to €12.5 billion.
The report said Fiat’s Iveco truck and CNH Global agricultural equipment units were profitable, helping shrink the company’s loss.
“This year will be another difficult year for Fiat,” Gareth Williams, an Actinvest analyst in London, told Bloomberg News, adding: “The Punto car will be phased out and the company will only start feeling the effects of sales of its new models and the money from the deal it stuck with General Motors. It’s essential Marchionne [CEO Sergio Marchionne who assumed the role at Fiat Auto two weeks ago after ousting Herbert Demel] does all he can to cut costs.”
The loss was narrower than the €400 million estimated by eight analysts surveyed by Bloomberg News.
“For the Fiat Group as a whole, 2005 will be another year devoted to restoring the company’s strength, with the expectation of reporting a further improvement in operating income and positive earnings after nonrecurring items,” the company reportedly said in the statement, adding: “Consequently, 2004 was the last year in which the Fiat Group will report a net loss.”
According to Bloomberg News, Marchionne said at a press conference on Monday that the company won’t sell shares this year in an initial public offering of its Ferrari unit – he also reportedly said the company won’t repay a convertible loan with cash in 2005.
The report said the fourth-quarter operating profit was €259 million and the full-year net loss of €1.59 million compared with a loss of €1.9 billion a year earlier. Full-year sales fell 1.2% to €46.7 billion The full-year operating income was €22 million, up from a loss of €510 million a year earlier.
