MILAN - The Italian automaker Fiat SpA posted a 67 per cent increase in the third-quarter profits Thursday on higher sales of Chrysler cars and trucks in North America.
Fiat reported a net profit of €112 million ($157 million) for the period ended Sept. 30, up from €73 million a year earlier. Without Chrysler, Fiat said it would have broken even.
Thanks largely to Chrysler, which Fiat controls, revenues more than doubled to €17.5 billion from €8.4 billion a year earlier. Chrysler revenues alone were €9.3 billion. It was the first quarter Chrysler was fully consolidated into Fiat's earnings.
Trading profit, or earnings before interest, taxes and one-time items, more than doubled to €851 million, from €256 million a year earlier.
After announcing the earnings, Fiat firmed up its 2011 guidance to more than €2.1 billion, from around €2.1 billion. It confirmed other targets, including revenues in excess of €58 billion and liquidity of €18 billion.
Fiat shares closed up 4.51 per cent at €5.10 ($7.16), before the earnings were announced.
Fiat, which in January spun off its industrial truck, agricultural and construction businesses, said its net profit was hurt by financial trading losses and unusual.
Fiat CEO Sergio Marchionne told a gathering of the Italian auto industry this week in Rome that Chrysler was making "a fundamental contribution to Fiat profits as it takes advantage of the important U.S. and Canadian markets."
Chrysler is running about double Fiat's speed, Marchionne said. Fiat has been hurting in Europe, where car sales have slumped due to the ongoing sovereign debt crisis, particularly in its main Italian market.
Fiat and Chrysler together this year are expected to build 4.2 million cars, to become the fifth biggest manufacturer in the world, Marchionne told the gathering. By 2014, he said that was destined to be 5.9 million.
Marchionne has identified 6 million as the threshold for an automaker to remain profitable in today's competitive market. He has said that Fiat, before taking on Chrysler in 2009, was too small and too beholden to the European business model to have succeeded alone.
In a separate statement, Fiat confirmed investment plans in Italy. Marchionne has said Fiat would invest €20 billion in Italy from 2010-2014, and Fiat said Thursday that €16 billion of that total is in the auto business and the remainder for Fiat Industrial SpA.
Fiat said that includes investments in tangible and intangible assets, including research and development.
In the first nine months, Fiat said it has invested €2.5 billion, excluding Chrysler. Of that total, €1.2 billion was in Italy.
Fiat's investments in Italy have been the subject of controversy, as unions accuse Fiat of becoming more American. Marchionne bristles at the charge, saying he is building a global business and that Fiat remains rooted in Italy.