Italy-based automaker Fiat S.p.A. recorded a 9.1 percent growth in profits in the first quarter of 2011, with the profitability of its Ferrari brand and the strong demand in Brazil identified as contributing factors to the increase, the company disclosed in a statement on Wednesday. The company reported its first results as a standalone entity after the spinoff of its industrial businesses into Fiat Industrial S.p.A. in January.
Specifically, the company gained a market share of 22.6 percent during the quarter. The Ferrari is also the company’s most profitable subsidiary, which will start delivering its first family car models by next month.
Analyst Andrea Balloni at Fidentiis Equities SA analyst in Milan stated in a note to investors ahead of the earnings that the performance of the Ferrari brand and the Brazilian market offsets greatly the weak vehicle market in the company’s home base, Italy. Revenue reached 9.2 billion euros, an increase of 7.1 percent.
The company’s so-called trading profit, which is earnings before interest, tax and one-time items, increased from 230 million euros last year to 251 million euros in the first quarter. The profits exceeded the 241 million-euro average forecast of 14 analysts that Bloomberg previously surveyed. Fiat reiterated that trading profit in 2011 will be between 900 million euros and 1.2 billion euros.
Earlier this year, CEO Sergio Marchionne listed Fiat's tractors and trucks units into a separate company to focus on vehicle manufacturing. Last week, Fiat increased its holding in U.S. carmaker Chrysler to 30 percent.
Fiat’s shares rose to 6.59 euros, as high as 31 cents, or 4.9 percent, and was up 4 percent as of 12:12 CET in Milan trading today. The shares have dropped 1.3 percent this year, valuing Fiat at 8.2 billion euros.