From the viewpoint that Fiat S.p.A (PinkSheets: FIATY) went into the third quarter pressured by two consecutive quarterly losses amid a mission to turnaround the financial circumstances of Chrysler LLC in which it had acquired a 20 percent stake upon emergency from bankruptcy in June, the Italian automaker’s results for the period under review still reflect a rebound notwithstanding a 95 percent year-on-year crash. For this reason, the company maintained its earlier guidance of at least $1.5 billion in annual operating profit come year-end.“I think it is fair to say the worst has passed...The organization has realigned its cost structure to deal with the reality of low sales volumes”, said Fiat’s CEO Sergio Marchionne during the presentation of the third quarter figures on Wednesday. Over the three months to September the carmaker had taken steps to fend off another loss through slashing administrative expenses expenditure by over 15 percent, and automobile inventories by almost 40 percent from the same period a year ago.
For the quarter Fiat said it managed a profit of $37.5 million ($0.025 per share), against a stronger profit of $702.6 million attained in the prior year quarter. Similarly, operating profit took a 61.5 percent nose-dive to $462.4 million from as much as $1.2 billion in the third quarter of 2008, due mainly to quizzed volumes. However, the carmaker calculated that its cash reserves rose 31 percent in the quarter compared to the previous period ended June.
Total revenue for the third quarter was reported at $18 billion, representing a decline of 15.9 percent from $21.5 billion last year, the company said. The firm’s auto business recorded a revenue slump of 1.4 percent even though buyers had started trickling in its showrooms backed by the cash-for-clunkers programme that took hold across Italy, UK, France and Germany. Fiat’s overall car sales went up 4.3 percent to 538,900 units during the period.
Fiat shares succumbed to a close of $16.20, from $16.75 on the news.
Reference:
http://www.fiat.com/cgi-bin/pbrand.dll/FIAT_COM/home.jsp
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