Fiat-Chrysler 2012 profit targets beat forecasts
MILAN (Reuters) - Italian carmaker Fiat-Chrysler surprised the market with lower 2012 profit targets that were still better than expected, sparking a share rally as investors shrugged off the threat of a weakening European economy that saw it cut its revenue outlook.
Fiat-Chrysler cut its trading profit forecast to between 3.8 and 4.5 billion euros for 2012, higher than the 3.18 billion euros analysts predicted. Guidance for 2012 net profit of 1.2-1.5 billion euros beat market consensus of 1.03 billion.
The carmaker cut its 2012 revenue target to about 77 billion euros to reflect slowing demand for cars as austerity measures hit the European economy. Fiat-Chrysler's previous 2012 revenue target had been 85 billion euros. A cut in targets had been widely flagged by the company.
"Recent events in the last 12 months, and more particularly in the last semester of 2011, have cast doubt on the volume assumptions governing the overall market and our own development plans for Europe until 2014," the automaker said.
Fiat-Chrysler uses the term "trading profit" to refer to operating profit, minus restructuring costs, gains from investments and other income.
"(Fiat gave) a very strong guidance with net profit guidance some 30 percent above consensus," a Milan fund manager said.
Its net profit for 2011 was 684 million euros, compared to 342 million the year before. The 2011 figure included results from Chrysler for the past two quarters.
Fiat-Chrysler reported a fourth quarter trading profit of 765 million, bang in line with forecasts, as its U.S. operations at Chrysler contributed 639 million euros.
Chrysler earlier said it swung to a full-year net income of $183 million, and made the bold prediction that profit would be eight times higher in 2012, on strong sales in its main U.S. market. Continued...