jpd80 Posted October 29, 2015 Share Posted October 29, 2015 Automotive NewsOctober 28, 2015 - 10:15 am ET -- UPDATED: 10/28/15 11:36 am ET - adds details Editor's note: Update corrects the converted currency figure in the second paragraph. Fiat Chrysler Automobiles reported a net loss of $331 million (299 million euros at today’s exchange rate) in the third quarter despite a strong performance in North America and recoveries in Europe and Latin America. FCA said it lost money because it booked a $667 million charge to its global reserves in the quarter to reflect the “current regulatory and recall environment.” The company said the charge stemmed from an accounting change in the way it estimates "future recall costs.” FCA signaled today that the increased costs of recalls “will likely trigger pricing actions to maintain profitability.” The third-quarter loss compares with a $208 million profit, in today’s dollars, that FCA reported during the same period a year earlier. The company is the global corporate parent of FCA US, the former Chrysler Group. In North America, the automaker reported revenue of $19.6 billion, up 35 percent. FCA recorded shipments in North America of 685,000 vehicles, up 12 percent, and sales of 674,000 vehicles, up 7 percent. The company said its North American adjusted profit margin was 6.1 percent, up from 4.1 percent a year earlier. Adjusted earnings before interest and taxes in the region more than doubled to $1.31 billion. FCA said its worldwide unit shipments for the quarter were flat at 1.1 million vehicles, largely because of declines in Latin America and Asia. Jeep shipments rose 27 percent worldwide as the SUV brand’s global expansion continued. Third-quarter global revenues rose 17 percent to $30.5 billion. The company reported cash of $22.6 billion, up from $20.6 billion in the third quarter of 2014. FCA said it had a gross industrial debt of $34.5 billion, down from $36.4 billion at the same point in 2014. The automaker’s U.S. sales were up 6.9 percent during the third quarter on strong demand for its pickups and SUVs. FCA confirmed its overall guidance for the year, saying it would ship approximately 4.8 million vehicles. It is projecting net revenues of approximately $122 billion. The company said it expects to report overall profit for 2015 of approximately $1.3 billion and to have a reduced net industrial debt of $7.3 billion to $7.9 billion to reflect transactions related to the Ferrari initial public offering. Previously, the company estimated it would finish the year with net industrial debt of $8.25 billion to $8.8 billion. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 29, 2015 Author Share Posted October 29, 2015 (edited) This is not good, FCA is sailing on a knife edge and any headwind encountered soaks up that modest profit. Edited October 29, 2015 by jpd80 Quote Link to comment Share on other sites More sharing options...
rmc523 Posted October 29, 2015 Share Posted October 29, 2015 Are they expecting some huge, expensive recall to come in the future? Quote Link to comment Share on other sites More sharing options...
akirby Posted October 29, 2015 Share Posted October 29, 2015 FCA signaled today that the increased costs of recalls “will likely trigger pricing actions to maintain profitability.” Yep. Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted October 29, 2015 Share Posted October 29, 2015 Well here's an idea, improve quality so you prevent a lions share of future recalls. Quote Link to comment Share on other sites More sharing options...
630land Posted October 29, 2015 Share Posted October 29, 2015 Why Serg wanted to merge. A ryhme! I posted before, but got a bad feeling that Chrysler and Dodge brands will join DeSoto and Plymouth. Fiat will not kill their Euro brands to save $, and Ram and Jeep are profitable. Who knows? Quote Link to comment Share on other sites More sharing options...
akirby Posted October 29, 2015 Share Posted October 29, 2015 Well here's an idea, improve quality so you prevent a lions share of future recalls. Easier said than done. Ford is in no position to throw stones on that issue lately. Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted October 29, 2015 Share Posted October 29, 2015 Easier said than done. Ford is in no position to throw stones on that issue lately. While that is true, there is no other automaker in the world that is consistent in the lower echelon of pretty much every quality survey out there. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted October 29, 2015 Share Posted October 29, 2015 Yeesh. Assumption 1: SUVs and trucks are the highest margin vehicles that a car company sells in this market Reality 1: No manufacturer in the US sells more SUVs and trucks as a percentage of overall volume than FCA. Reality 2: FCA's margins were the worst of the unionized auto makers last quarter. And not by a narrow margin either. They were around half those of GM and Ford. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 29, 2015 Author Share Posted October 29, 2015 Yeesh. Assumption 1: SUVs and trucks are the highest margin vehicles that a car company sells in this market Reality 1: No manufacturer in the US sells more SUVs and trucks as a percentage of overall volume than FCA. Reality 2: FCA's margins were the worst of the unionized auto makers last quarter. And not by a narrow margin either. They were around half those of GM and Ford. And these are the good times with bumper sales of large trucks and Utilities that swell Chrysler Nth America;s profits. I wonder how long until FCA is in real financial hot water..... Quote Link to comment Share on other sites More sharing options...
akirby Posted October 29, 2015 Share Posted October 29, 2015 Didn't we already hear that FCA was cutting back on new product investments? If so then I doubt they can maintain those margins for more than a few years. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 29, 2015 Author Share Posted October 29, 2015 Didn't we already hear that FCA was cutting back on new product investments? If so then I doubt they can maintain those margins for more than a few years. The pond is beginning to dry up, no wonder Sergio is flapping about... Quote Link to comment Share on other sites More sharing options...
Anthony Posted October 30, 2015 Share Posted October 30, 2015 Yeesh. Assumption 1: SUVs and trucks are the highest margin vehicles that a car company sells in this market Reality 1: No manufacturer in the US sells more SUVs and trucks as a percentage of overall volume than FCA. Reality 2: FCA's margins were the worst of the unionized auto makers last quarter. And not by a narrow margin either. They were around half those of GM and Ford. And now they look to be doubling down: Fiat Chrysler studies making Suburban/Expedition fighter under Ram Quote Link to comment Share on other sites More sharing options...
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