A slowdown in Jeep sales has been worsened by ongoing shifts in production capacity.

Fiat Chrysler Automobiles saw its second-quarter net earnings more than double, to $1.35 billion, with foreign demand and improvements by the Maserati brand offsetting weakened sales in North America.

FCA delivered earnings of $0.81 per share, well ahead of the $0.53 consensus forecast by 28 analysts tracked by MarketWatch. The maker’s profit margins reached a record 6.7% for the quarter, up a full percentage point, and margins climbed to 8.4% in North America, despite the slowdown in demand that has particularly weakened the Jeep brand.

“It was a strong quarter,” Chief Financial Officer Richard Palmer said in a conference call with analysts and investors. “With the progress we’ve made in the first half of the year, we are confirming our full-year guidance.”

(Feds indict former FCA, UAW execs in $1.2 mil kickback scheme. Click Here for the story.)

There were some downsides to the latest earnings report. For one thing, the Euro-American automaker drove down debt to $4.9 billion by the end of the quarter, a $200 million decline from the end of March. But analysts had been expecting FCA to drive it to somewhere around $3.9 billion. The automaker told investors Thursday it is still expecting to bring debt down by half this year.

Maserati sales - and profit margins - have skyrocketed with the introduction of the Levante SUV.

Pre-tax profits for the second quarter actually dipped slightly in North America to $1.58 billion, down from $1.61 billion the year before. Vehicle sales totaled 576,000 for the period, a 14% decline.

It hasn’t helped that FCA is still working on several key factories. It is converting the Sterling Heights Assembly Plant in suburban Detroit to produce pickups. It had been building the Chrysler 200 sedan, but the automaker has now stopped producing all passenger car models in the U.S.

An even bigger hit has come from Jeep. The SUV brand was the source of much of FCA’s growth following the bankruptcy of the old Chrysler and its merger with Italy’s Fiat SpA. But demand dropped 13% for the first half of this year, 11% in June. Jeep’s marked share, according to industry data, fell 0.5 points during the first half, to 4.8 percent.

Part of the challenge has been a shift in production capacity. The Cherokee was moved out of a plant in Toledo, Ohio to a factory in Belvidere, Illinois. That facility, which had been building the now-abandoned Dodge Dart, only went back into production last month. Meanwhile, the renovated Toledo line will only start building a new version of the iconic Jeep Wrangler later this year.

(Ford posts better-than-expected Q2 earnings. Click Here for the full story.)

On the plus side, FCA’s adjusted earnings before interest and taxes rose 15%, to $1.87 billion, during the April-June quarter, also beating analysts’ expectations. And global revenues rose ever so slightly for the latest quarter, to $32.7 billion from $32.67 billion a year earlier.

FCA CEO Sergio Marchionne still aims to halve the automaker's industrial debt this year.

Credit improved sales and earnings in the European and South American markets.

The Maserati brand proved a solid source of growth during the quarter, its margins also more than doubling to 14.2%, largely on the popularity of the marque’s first-ever sport-utility vehicle, the Levante. FCA also reported some positive momentum from its critical Alfa Romeo brand which also entered the SUV market for the first time with the launch of the Stelvio.

FCA CEO Sergio Marchionne has made a major commitment to growing the Alfa brand and has a slew of other new models on tap for the next few years. Growth in the U.S. market will be critical for that marque’s revival.

But with overall sales in the States slowing that could compound FCA’s challenges in the months to come, analysts have warned.

(GM earnings tumble on weakening U.S. demand. Click Here for the story.)

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