Despite speculation about a possible sale and future prospects looking shakey, Fiat Chrysler Automobiles N.V. posted strong third quarter net income results, increasing 52% to $1.1 billion.
FCA reported pretax profits of $2.1 billion beat analysts’ expectations of $1.02 billion, according to MarketWatch. Earnings per share of 70 cents jumped compared with 56 cents during the same period in 2016.
Sergio Marchionne, FCA chief executive officer, said the company is closing in on its ambitious goals, including becoming debt free and banking cash reserves of between $4 billion and $5 billion in cash, despite its ambitious plan to re-align factories across North America.
“Those numbers are deliverable now,” said Marchionne, even without tax form. He also who also dismissed talk that FCA was for sale. “I’m monogamous now,” he said.
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“We’ve got three product launches in the next 90 days,” Marchionne said. “Flawless execution of that plan will guarantee ’18. I think we’re in good shape. Its been an unusual because of the all the changes.”
Marchionne noted in Toledo, Ohio, the plant realignment will give FCA the capacity to build 300,000 Jeep Wranglers for global distribution. The total capacity from Toledo could grow to 400,000 units, he noted.
“We need to keep on pushing Jeep to make sure it becomes as global and as profitable as it can be,” Marchionne said.
The new Toledo-built Wrangler will be revealed in December and the new Jeep Cherokee, which will be built at the FCA plant in Belvidere, Illinois, just outside Chicago, will be launched in January. The new Ram pickup truck will also start rolling out of a re-tooled factory Sterling Heights, Michigan, during the first quarter of 2018.
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Overall, the three launches combined represent the production of 1 million new vehicles. “We’ve been investing heavily in new production,” said Palmer, adding that once the re-alignment is complete, the company will shift capital spending towards new models and research and development.
The key is to embrace partnerships as the optimal way to develop. The platform FCA now is developing with BMW, Mobileye and Intel “will be scalable will be used by multiple OEMs,” he said. The platform is also flexible enough to help the different brands retain their distinctive character.
“Don’t believe the fluff. There are no shortcuts,” Marchionne said. “I can’t think of a better partner for this journey than BMW.”
Overall, FCA’s operating margin improved in North America, Latin America, where the numbers went from a loss to a small profit and in Asia Pacific where the company expanded its footprint in China and India.
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“All of our units made positive contributions,” said CFO Richard Palmer, who also re-confirmed the company’s outlook for 2018. The improvement in the company income and margins came even though the combined shipments were and revenues were essentially flat.