Fiat Chrysler boasts a 7% increase in quarterly profit in its earnings report on Thursday

In its earnings report on Thursday, Fiat Chrysler Automobiles (FCA) announced a 7% increase in quarterly profit. The company said its North American business picked up pace in the fourth quarter with supporting results from Latin America as well. The company is currently seeking a merger with France’s PSA.

FCA’s Figures Versus Analysts’ Estimates

Adjusted earnings for the Italian-American carmaker surged to €2.12 billion in the recent quarter. Analysts had anticipated its adjusted earnings to print at €2.11 billion. In terms of adjusted operating profit in the fourth quarter, Fiat Chrysler boasted €6.67 billion versus a slightly higher €6.7 billion forecast by the experts. The company had previously announced a target of over 6.1% for the adjusted EBITDA margin. Printing 6.2% in the fourth quarter, the automaker met its target for adjusted EBITDA as per the earnings report on Thursday.

Although not official, a trader of the company in the stock market highlighted the earnings report to have been marginally optimistic than the expectations. Following the earnings report, Fiat Chrysler was seen trading 3.4% higher on Thursday.

With emissions rules for the auto industry getting tighter, carmakers are under more pressure than ever before to produce environment-friendly vehicles. A side-effect of that is increasing costs for the manufacturers. On top of that, recently weakening global demand further weighs on the auto industry. In an attempt to cope with such challenges, Peugeot maker PSA and Fiat Chrysler had announced a merger worth $50 billion in December. Following the completion of the merger, the joint venture will mark the world’s fourth-largest carmaker.

CEO Mike Manley Says Merger Will Be Completed In The Next Year

According to CEO Mike Manley, the deal is progressing in line with the schedule and is likely to be completed in the first quarter of 2021. Fiat Chrysler has also expressed confidence in raising its adjusted EBITDA to over €7 billion in 2020. FCA also said it is currently evaluating the potential impact that the coronavirus outbreak in China may have on its performance in the upcoming months.

FCA’s performance in the stock market in 2020 has remained downbeat so far. Opening at €13.36 in January, the stock has lost around 10% in over a month. At the time of writing, the stock is exchanging hands at around €12.21.

In 2019, FCA’s performance remained largely flat on average with the company closing the year at around €13 per share, the same level at which it opened in January.