Fiat Chrysler Automobiles met its full-year guidance as strong results from North America and improving operations in Europe managed to offset persistent weakness in Latin America, the company said in a press release.
The world's seventh-largest carmaker, which moved its primary listing to New York in October and is due to spin off luxury unit Ferrari later this year, reported operating profit adjusted for unusual items of 3.65 billion euros ($4.1 billion).
This compares with a guidance range of between 3.6 billion-4 billion euros and an analyst forecast of 3.4 billion euros, according to Thomson Reuters SmartEstimate.
Net income was 632 million euros ($617.4 million).
Revenue rose 11 percent to 96.1 billion euros ($109 billion), while net debt at the end of last year rose to 7.7 billion euros, up from 7 billion at end-2013.
For this year, FCA forecast operating profit, excluding unusual items, of between 4.1 billion-4.5 billion euros, while revenues are seen rising to around 108 billion euros. Worldwide shipments are seen rising to around 4.8 million-5 million vehicles, up from 4.6 million last year.
This year, FCA is expected to increase spending as it pushes ahead with a 48 billion euro expansion plan meant to boost the carmaker's global sales by 60 percent to 7 million cars between 2014 and 2018 and increase net profit fivefold.
The carmaker has begun turning the corner in Europe and may even break even in the region at an operating level this year as a focus on premium vehicles for export starts to pay off. In 2014, FCA trimmed its operating losses in Europe to 109 million euros from 506 million the previous year.
Along with other mass market producers, FCA was hit by a six-year slump in European car sales, from which the region is only slowly recovering. It has forced FCA to increasingly rely on its U.S. operations for profit. The North American business contributed just over half of FCA's operating profit and 55 percent of revenues last year.
FCA US sales rose 16 percent to 2,090,639 vehicles last year. The overall U.S. market rose 6 percent during the same period.
FCA shares have risen more than 60 percent last year, lifted by Fiat's buyout of Chrysler, the merged firm's move to Wall Street and its announcement of the Ferrari spin-off. The stock hit a high of over 12 euros this week on expectation that the strong dollar would become a major boost for the company in coming months.
FCA memo to employees
The following is a letter from Fiat Chrysler CEO Sergio Marchionne to employees, obtained by Automotive News:
Dear Colleagues,
Capping off an historic year, during which we made the transition to a single, global organization, FCA today released its preliminary 2014 financial results that report strong performance in line with our expectations. These results are testimony to your continued commitment to our values, the ability to maintain focus on our key objectives and our determination to build a truly special group.
We shipped 4.6 million vehicles in 2014, an increase of 6 percent over the previous year, with NAFTA, APAC and EMEA all contributing to the growth and the Jeep brand setting an all-time annual record with global sales of more than one million units.
The increase in shipments, together with a better product mix, drove revenues 11 percent higher to €96.1 billion, with increases in all regions but LATAM, where weak market conditions continued.
EBIT (Earnings Before Interest and Taxes) increased 7 percent to €3.2 billion. Excluding unusual items, EBIT totaled €3.7 billion, with strong improvements for APAC, Maserati and EMEA, which returned to profitability in the fourth quarter, an indication that we are turning the corner in the region as our focus on producing premium vehicles for export begins to pay off.
FCA posted a net profit of €632 million for the year. Excluding unusual items, net profit was €955 million, which represented a slight improvement over the prior year.
We will remember 2014 as a momentous year that included the formation of FCA (now the world’s seventh-largest automaker), the debut of our shares on the NYSE, our return to the U.S. equity markets, record sales for both Jeep and Maserati and the return of Alfa Romeo to North America after a 20-year absence. We also presented an ambitious five-year plan to grow our business and continue building an extraordinary enterprise that has the potential to enrich us at both the industrial and the human levels.
We have already begun 2015 with the same momentum. Based on positive results for the new Jeep Renegade and Fiat 500X, earlier this month we announced plans to add 1,500 new jobs at the Melfi plant, where we have already invested more than €1 billion in production of the new models. At the North American International Auto Show in Detroit, we unveiled the all-new 2015 Alfa Romeo 4C Spider, another step on our way to reinvigorating Alfa Romeo and making it a true global brand. We also introduced the new 2015 Ram 1500 Rebel and announced the new Ram 1500 EcoDiesel HFE, which remains the most fuel-efficient full-size pickup in North America.
This is just the beginning of a new year filled with opportunities for continued growth together with the challenges of an incredibly competitive landscape.
Let’s continue to dream big and take accountability for achieving our targets so that this time next year we, as a team, can look back with pride at the progress we have made as we continue this remarkable journey.
