MILAN, Italy -- Weak sales in Europe and the U.S. and lower profits at U.S. partner Chrysler pushed Italian carmaker Fiat to a loss in the first quarter.
Fiat SpA on Monday said it lost 83 million euros ($108 million) during the first three months of the year, compared with a restated first-quarter profit of 35 million euros in the same period of 2012. A part of the drop was due to a change in accounting methods.
Chrysler LLC, which Fiat controls, saw its first-quarter profits drop 65 per cent as shipments of cars and trucks were down in preparation for new vehicle launches, including the all-new Jeep Cherokee, which goes into production in the second quarter. However, Fiat's European branch narrowed its losses to 157 million euros, from 207 million euros a year earlier.
Overall revenues were down 2 per cent to 19.75 billion euros, as performance in Latin America, Asia and its premium brands helped compensate for declines in North America and Europe. Revenues were down 3 per cent to 10 billion euros in North America and 4 per cent to 4.4 billion euros in Europe.
Fiat shares, after initially dropping on Chrysler earnings, rebounded to rise 0.4 per cent to 4.17 euros.
Fiat, based in the northern Italian city of Turin, controls a 58.5 per cent stake in Chrysler, which it took control of in 2009. The Italian carmaker's plans to buy out its minority shareholder, the pension health trust for the autoworker's union, has been stalled by a dispute over price. A U.S. judge is set to make a ruling on Fiat's offer for one 3.3 per cent stake in June, which could establish a price benchmark to complete the purchase. Fiat and Chrysler CEO Sergio Marchionne wants to avoid a public offer to buy the rest of Chrysler, preferring to launch an IPO once a merger with Fiat is complete. A merger could be achieved as early as mid-2014.
The CEO has insisted Fiat has enough cash to complete the Chrysler acquisition. Fiat had 21.3 billion in liquidity at the end of the quarter, 11 billion euros attributable to Fiat and 10.3 billion euros to Chrysler.
Fiat confirmed its 2013 forecasts for profits of between 1.2 billion euros and 1.5 billion euros ($1.5 million-$1.9 million) on revenues between 88 billion euros and 92 billion euros.
