Fiat Group logged a 5-percent surge in trading profit in the fourth quarter of 2013 to EUR931 million ($1.27 billion) from EUR887 million in the same period in 2012. Trading profit is earnings before interest, tax and one-time items. The results were lower than analysts' consensus of EUR1.15 billion, no thanks to a decline in profit in Latin America that offset a surge by Chrysler in the United States.
Fiat posted a 10-percent surge in revenues to EUR24 billion. Chrysler, meanwhile, logged $1.6 billion in net income in fourth quarter of 2013, boosted by a one-time tax gain of $962 million, compared to $378 million a year prior. For the full year, Chrysler posted $2.8 billion in net income, up from $1.7 billion in 2012.
Fiat expects its group trading profit to rise to between EUR3.6 billion and EUR4 billion from EUR3.39 billion in 2013. It was below the forecast of between EUR4.7 billion and EUR5.2 billion given in October 2012. It was also below an analyst forecast of EUR4.15 billion.
The Italian carmaker said that it would not pay a dividend on 2013 earnings in order to maintain liquidity as it took full control of Chrysler earlier this month. "The results were disappointing and fell short of expectations. Fiat is a restructuring story. It needs time," remarked Gabriele Roghi, head of investment at Invest Banca.
Latin America and Chrysler have become more important to Fiat as it tries to offset slumping demand in Europe. Its Brazilian business, however, have been suffering from the termination of car sales incentives and currency effects. "One major factor was obviously Latin America, that came in clearly below (expectations)," said Sascha Gommel, an analyst at Commerzbank.