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Fiat Chrysler Shares Tumble After 2018 Outlook Cut

Fiat Chrysler Shares Tumble After 2018 Outlook Cut

Wednesday, 25 July 2018 08:37 AM

Fiat Chrysler reported second-quarter operating profit below expectations on Wednesday, sending its shares sharply lower as the carmaker cut its full-year outlook in response to a weaker performance in China.

The earnings were overshadowed by the news that former Chief Executive Sergio Marchionne had died after suffering complications from surgery.

Jeep head Mike Manley, appointed just four days earlier to succeed Marchionne as CEO, opened the company's results presentation with a minute's silence.

FCA said adjusted earnings before interest and tax (EBIT) for the April-June period fell 11 percent to 1.7 billion euros ($1.99 billion), compared with 2 billion euros in a Reuters poll of analysts.

"The biggest challenges we face and frankly we're going to continue to face ... are all focused in China," Manley said.

FCA shares (FCAU) were down 8.3 percent at 15.18 euros in Milan at 1222 GMT.

Chinese demand slumped in the quarter ahead of a July cut in import duties, resulting in higher incentive spending and an increase in unsold vehicle stocks that "particularly affected Maserati," Manley said.

The rise in the group's inventory, from 98 days of sales to 129 for Asia Pacific, will continue to impact results as stocks are cleared ahead of new emissions regulations, Manley added.

Net revenue rose 4 percent, in line with expectations.

FCA said it expected 2018 net revenues of between 115-118 billion euros, down from a previous forecast of around 125 billion euros, while adjusted EBIT is expected at between 7.5-8.0 billion euros from at least 8.7 billion.

© 2019 Thomson/Reuters. All rights reserved.

   
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Fiat Chrysler reported second-quarter operating profit below expectations on Wednesday, sending its shares sharply lower as the carmaker cut its full-year outlook in response to a weaker performance in China.
fiat, chrysler, outlook, shares
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2018-37-25
Wednesday, 25 July 2018 08:37 AM
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