Fiat Chrysler Automobiles (FCA) could overtake Ford on earnings this year according to remarks attributed to CEO Sergio Marchionne.
The Financial Times reported that Marchionne said there is a “very strong likelihood we’ll outperform Ford in earnings in 2018.” FCA forecasts annual adjusted profit of EUR8.7bn in 2018. Ford’s net income in 2017 was US$7.6bn. Ford has warned that 2018 profit will struggle to match 2017’s as it faces headwinds on raw material costs.
Marchionne was speaking following the posting of results that showed net profit in 2017 up by 93% to EUR3.5bn, driven by strong sales of high-margin trucks in North America.
FCA’s Q4 operating profit (adjusted EBIT) was ahead of Ford’s at EUR1.89bn (compared with Ford’s US$1.7bn – around EUR1.4bn).
FCA also says it will be debt-free by the middle of the year and that last year its debt was cut to just EUR2.4bn.
Analysts note that model mix has boosted profits at FCA, with higher margin pickups and SUVs more than compensating for lower overall unit sales. In North America, FCA axed car lines. In 2018 it gets the benefit of a new Ram pickup and Jeep Wrangler.
Last week the company announced a US$5,500 profit share for its US employees.