Fiat Chrysler earnings down on poor Latin American results

MILAN – Carmaker Fiat Chrysler said Wednesday it would revise its five-year business expansion plan after reporting a 40 per cent drop in earnings last year due to a poor performance in Latin America and Asia and flat global sales.

The Italian-American carmaker reported 2015 net profit of 377 million euros ($409 million), down from 632 million euros a year earlier and lagging analyst expectations of 540 million euros. Fourth-quarter net profit fell 40 per cent to 251 million euros.

U.S. carmaker Chrysler drove the group’s full-year revenue growth of 18 per cent, mainly on Jeep sales, with North American revenues getting a one-third boost to 70 billion euros. Revenues slumped by 25 per cent in Latin America, where the carmaker said it suffered under poor trading conditions in Brazil and Argentina, and 22 per cent in Asia, while rising by 13 per cent in Europe.

Net revenues for the group were 113 billion euros, up 18 per cent, and slightly beating analyst forecasts of 112 billion euros as compiled by information company FactSet.

The world’s seventh-largest carmaker laid out ambitious plans in 2014 to grow sales to more than 7 million cars and trucks by 2018, relying heavily on Jeep while also planning to boost production in Italy of higher-margin Maserati and Alfa Romeo brand.

Fiat Chrysler CEO Sergio Marchionne’s goal as it stands would be a 50 per cent increase over last year’s global sales of 4.6 million units, which showed little growth over the previous year.

Marchionne has already said that plans for Alfa Romeo rollouts could be shifted due to the slowing China market. And Maserati posted disappointing results last year, with revenues dipping 13 per cent. Fiat Chrysler said it expects Maserati performance to improve in the second half of the year with the launch of the Levante.

The 2015 results included Ferrari, which spun off from its mass-market parent at the start of this year with a Milan stock exchange listing in addition to one on Wall Street. Ferrari net profit dropped 4 per cent last year.

Fiat Chrysler said that in 2016 it expects 110 billion euros in net revenues and 1.9 billion euros in adjusted net profits.

Its shares dropped nearly 3 per cent to 6.80 euros, while Ferrari shares were down 1.3 per cent to 37.33 euros in Milan trading.