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FCA First Quarter Results are in

by David Zatz on

FCA has released its first quarter results, with Jeep’s 1.1 million worldwide shipments headlining the executive summary. This is an 11% volume increase in shipments, and a 22% year-over-year sales increase.

Overall, FCA saw shipments fall 2%, with the greatest deficit in Latin America (down 34%). North America was the exception, with shipments growing by 8% and gross earnings growing by a stunning 38%. Gross earnings also grew in Asia-Pacific (by 1%) and Europe/Middle East/Africa (EMEA) by 8%, as FCA’s “premium strategy” takes hold and high sales of cheap but unprofitable cars yield to somewhat lower sales of moderately or premium priced and profitable cars. The decline in South America appears to have been largely due to a general sales drop.

Shipments Adjusted EBIT (M)
North America 633,000 +8% €601 n/a
South America 135,000 -34% -€65 -4.2%
Asia-Pacific 47,000 -13% €65 +4.3%
Europe/Africa 271,000 +5% €25 +0.5%


Thus, despite losses in sales, only one region — South America — failed to show a profit (before interest and taxes).  North America’s EBIT clearly dominated the company.

This chart does not include Ferrari, which sold 1,635 cars (down 6%), or Maserati, which sold 7,306 (down 9%). Maserati had a banner year in 2014, so the drop is not as bad as it seems at first glance. It also does not include the components and robotics business.

Financially, Ferrari had a good quarter, with a $110 million EBIT; Maserati had a comfortable if small $40 million EBIT, even as the division continued to invest in a new lineup; and the components/robots business brought in a $75 million EBIT. The result was a total EBIT of $876 million vs $299 million in the first quarter of 2014. This came, though, with an increase in debt due to hefty investments such as the renovation of Windsor and the new plant in Brazil, along with major product layouts.

FCA had net revenues of $29 billion, with an adjusted earnings before interest and taxes of $884 million and final net profit of $102 million. The company has a comfortable $28 billion in available cash, including lines of credit, but its net industrial debt stands at a hefty $9.5 billion. (Numbers were reported in euros and converted to dollars based on today’s rates.)

In the first quarter of 2014, FCA reported a net loss of $191 million, largely due to one-off charges, including a payment to the North American pension plan operated by the UAW.

The company noted that the Fiat 500X has been launched in Europe, the Jeep Renegade in North America, and the Ram ProMaster City in North America, while, as noted earlier, the new Pernambuco (Brazil) plant has started production of Jeep Renegades for South America. They also pointed out that North American sales rose despite scheduled downtime for the Windsor minivan plant.

For the full year 2015, FCA expects to ship 4.8-5.0 million vehicles, earn gross revenues of $119 billion with a net profit of $1.1-$1.3 billion, and end up with a net industrial debt of $8.3-$8.9 billion.

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