By COLLEEN BARRYAP Business Writer
MILAN (AP) - Strong sales by its U.S. subsidiary, Chrysler, came to the rescue of Italian carmaker Fiat on Tuesday as it reported a quadrupling in second-quarter net income.
Fiat, which is based in the northern city of Turin, said net profit for the three months ending June 30 was 142 million euros ($188 million), up from a restated profit of 32 million euros in the same period last year. Without Chrysler, in which Fiat holds a majority stake, the Italian company would have lost 247 million euros, as European sales dropped 5 percent.
Fiat shares dropped 4.7 percent to 6 euros in Milan trading.
Worldwide car shipments were up 5 percent in the quarter to 1.2 million units, more than half of those Chrysler brands. North American sales rose 4 percent, while Asia and Latin America posted double-digit growth. Revenues for the quarter were 22 billion euros, up 4 percent over the previous year.
Europe's recession continued to weigh on Fiat's results. Fiat sold 234,000 passenger cars badged Fiat, Lancia and Alfa Romeo in the quarter. Its market share shrank 0.5 percentage points to 6.3 percent "reflecting the continued reduction in Italy's overall weighting in the European market," Fiat said.
In the United States, Chrysler Group's sales picked up in the quarter on strong demand for trucks and SUVs, hitting 643,000 vehicles with growth outpacing the industry average. Still, Chrysler cut its full-year sales and profit targets after a slower than expected start to the year.
Chrysler said it now expects to ship 2.6 million vehicles worldwide in 2013, at the low end of its target of between 2.6 million and 2.7 million. It expects to earn between $1.7 billion and $2.2 billion, down from its previous target of around $2.2 billion.
Fiat took the majority stake in Chrysler in 2009, however its efforts to buy out a minority stockholder have been stymied by a disagreement over a price. A court in Delaware is deliberating Fiat's petition to put a value on an initial 3.3 stake, which will form the basis for determining the value of further shares.
The Italian auto group cut European trading losses - or losses before interest, taxes and one-off items - by 40 million euros to 98 million euros, thanks to cost cutting and the success of the larger version of its popular 500 model, the 500L, which sold 18,000 units in the quarter.
The carmaker's luxury brands contributed 105 million euros thanks to performance sportscar maker Ferrari. Maserati dipped due to costs associated with the launch of the new Quattroporte.
Fiat confirmed its 2013 targets of a trading profit between 1.2 billion euros to 1.5 billion euros on revenues of at least 88 billion euros.
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