What Does Maserati’s Solid 4Q16 Mean for Fiat Chrysler Investors?



Fiat Chrysler’s luxury segment

In late 2014, Fiat Chrysler Automobiles (FCAU) announced its intention to spin off Ferrari (RACE) as an independent entity. The spin-off process was completed in January 2016, leaving Maserati as the key vehicle brand left in its super luxury vehicle portfolio.

In this part of the series, we’ll take a look at the performance of the Maserati brand in 4Q16 and what it means for Fiat Chrysler investors.

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Maserati in 4Q16

In 4Q16, Fiat Chrysler shipped 18,237 units of Maserati brand cars. That was 83.0% higher than the 9,971 units in 4Q15. With that increase, 4Q16 revenues from the luxury car brand nearly doubled year-over-year to 1.5 billion euros, or $1.6 billion. The significant increase in Maserati revenues was much higher than the increase in shipments due to a positive product mix and a favorable currency movement.

While the company’s reporting currency is the euro, a large part of Maserati’s revenues comes from the United States, in US dollars. So Fiat Chrysler benefits from a strengthening US dollar and a weakening euro.

Japanese automakers Toyota (TM) and Honda (HMC) also benefited from favorable currency movements due to the weakening Japanese yen over the last several quarters. A strengthening US dollar typically has a negative impact on the revenues of major US automakers (XLY), including General Motors (GM) and Ford (F).

Maserati’s 4Q16 profitability

In 4Q16, adjusted EBIT (earnings before interest and tax) from Maserati was 184.0 million euros, or $197.0 million. With that, Maserati’s adjusted EBIT margin rose to 12.1% for the quarter from just 1.8% in 4Q15.

Improving profitability of the brand was primarily driven by a strong demand for the recently launched Maserati Levante car model, which drove a positive product mix. Continued strength in the Maserati brand could help Fiat Chrysler achieve higher margin goals. So it’s important to pay attention to the performance of the Maserati brand.


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