Fiat Chrysler Automobiles announced Tuesday it earned a profit of $659 million during the third quarter, backed by strong performances from its Jeep and Ram divisions, and solid sales in three of four global regions.
The seventh-largest automaker improved these profits despite shipments of its new cars and trucks dropping 1% over the quarter, mainly thanks to a sharp decline in both the discontinued Dodge Dart and Chrysler 200 models. FCA’s total revenue remained flat against last year, with a $29.2 billion 3Q total.
In contrast, FCA took a $421 million loss over this same quarter last year because of recall costs and overseas plant issues. This year's quarterly gains are a welcome relief for the company as it attempts to position itself for several new vehicle roll outs in the next two years - including a new generation Wrangler, Jeep Truck and Jeep Wagoneer/Grand Wagoneer.
“Third quarter financial results were strong,” FCA’s Chief Financial Officer Richard Palmer said. “We had our best third quarter ever for adjusted earnings…and our best adjusted net profit ever.”
The company reported its adjusted earnings before interest and taxes rose 29% to $1.63 billion, while its adjusted net profit jumped to nearly $803 million.
FCA’s profits improved in North America, Europe and China as sales of Jeep and Ram vehicles remained strong even as the company’s car sales slowed. Overall, Jeep sales grew 5% for the quarter, while Ram finished with an 11% increase.
The automaker announced earlier this year it would shift away from car production in the North American market and focus efforts toward higher-profit Jeep, truck, and SUV brands which are still driving customers into FCA dealerships even as analysts worry about an overall market-wide slow down.
FCA’s profit margin in North America increased to 7.6% for the quarter, which was nearly a full percentage point higher than last year and important for the company as it attempts to reduce its industry-leading debt load – currently sitting just north of $7 billion.
The automaker has made reducing this debt a priority, possibly spinning off company-owned suppliers like Comau or Magneti Morelli to generate additional cash, but FCA CEO Sergio Marchionne said Tuesday there would not be any sale of subsidiaries in the foreseeable future.
