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Fiat Chrysler’s Record Q1 Profits, Debt Reduction on Track

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Fiat Chrysler’s 1Q18 earnings

Fiat Chrysler Automobiles (FCAU) reported its first-quarter results today before the US market opened. With the company’s 2% rise in revenues, it managed to report solid growth of 55% YoY (year-over-year) in net profits for the quarter. FCAU’s 1Q18 adjusted earnings were at 0.66 euros or ~$0.80 per share, up 54% YoY and at par with Wall Street analysts’ consensus of 0.66 euros per share. Fiat Chrysler stock had risen to $24.15 with 2.9% gains from the previous close in the pre-market trading session as of 8:55 AM EST.

Revenue and profitability

In 1Q18, Fiat Chrysler’s revenue fell 2% YoY to 27.02 billion euros or ~$32.87 billion. The decline in the company’s revenue was primarily driven by unfavorable currency headwinds, and its revenue rose 9% YoY at constant exchange rates. FCAU’s revenues fell in all segments except Latin America and EMEA (Europe, the Middle East, and Africa).

Fiat Chrysler’s first-quarter adjusted EBIT (earnings before interest and taxes) rose 5% YoY this year to 1.61 billion euros or ~$1.96 billion. Moreover, its adjusted EBIT margin expanded to 6.0% in 1Q18, compared to 5.5% in 1Q17.

Likewise, FCAU’s 1Q18 adjusted net profit jumped 55% YoY to 1.04 billion euros or ~$1.27 billion with an expanded margin of 3.8%, compared to 2.4% a year ago.

Lower tax expenses due to recent US tax reforms and lower financial charges were two of the main factors that drove the company’s profits higher in 1Q18.

Debt reduction and 2018 outlook

Fiat Chrysler continued its debt reduction. It was able to reduce its net industrial debt by 1.10 billion euros or ~$1.34 billion. After the reduction, the company’s net industrial debt stood at 1.31 billion euros or ~$1.59 billion at the end of 1Q18.

Interestingly, FCAU has managed to reduce its debt significantly in the last couple of years. It plans to have net industrial cash of about 4 billion euros or ~$4.9 billion by the end of fiscal 2018.

During its 1Q18 earnings event, Fiat Chrysler also announced that it would reveal its 2018–2022 business plan on June 1.

Yesterday, Ford Motor Company (F) announced its 1Q18 results. See Lower Tax Rate Boosted Ford’s 1Q18 Revenue; Earnings Margin Fell to learn more.

Auto companies (IYK) Tesla (TSLA) and Ferrari (RACE) should be releasing their 1Q18 results next week. Please visit Market Realist’s Autos page to stay updated on analysts’ estimates for auto companies’ 1Q18 earnings.

And check out all the data we’ve added to our quote pages. Now you can get a valuation snapshot, earnings and revenue estimates, and historical data as well as dividend info. Take a look!

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