Although FCA (Fiat-Chrysler) has posted healthy looking overall third-quarter financial results, investors have been disappointed by special items that included a diesel charge in the US and additional pension contributions related to the sale of parts division Magneti Marelli.
FAC posted record Q3 adjusted EBIT at EUR2bn and margin at 6.9%, including Magneti Marelli. NAFTA was up 51% with margin at 10.2%, and adjusted net profit was posted at EUR1.4bn, up 51%. However, Q3 net profit was down 38% to EUR0.6bn, including an EUR0.7bn charge related to 'US diesel emissions matters'. Net industrial cash was down, reflecting lower production – a 'realignment to expected demand' – and accelerated discretionary pension contributions.
Net revenues were posted at EUR28.8bn, up 9% (up 11% at constant exchange rates), with higher shipments, positive pricing and mix, FCA said.
Moody's raised FCA's outlook to positive from stable.
After the agreement to sell Magneti Marelli to CK (Calsonic Kansei) Holdings , Ltd, FCA said the combined business will operate under the name Magneti Marelli CK Holdings. The agreement represents a transaction value of EUR6.2bn and enables the payment of an extraordinary dividend of EUR2bn at closing (which did cheer investors).
FCA confirmed its operating guidance for the full-year. However, its forecast for net cash was reduced to between EUR1.5-2.0bn from around EUR3bn previously.
The NAFTA region recorded a Q3 adjusted EBIT of EUR1.9bn, with record 10.2% margin on the back of new Jeep and Ram models. NAFTA Q3 vehicle shipments were up 14% to 673,000 mainly due to the new Ram 1500 and Jeep Wrangler, as well as new Jeep Cherokee.
FCA said LATAM was up 41% despite economic deterioration in Argentina and negative foreign exchange effects.
However, EMEA saw an adjusted EBIT loss (-EUR25m) due to Worldwide Harmonised Light Vehicle Test Procedure (WLTP) transition and 'associated negative price impacts'.
APAC earnings also showed a negative (-EUR96m) due to lower China volumes.
Third-quarter Maserati earnings decreased due to lower China and Europe volumes.