The logos of car manufacturers Fiat and Peugeot stand outside dealerships in Saint-Nazaire, France, on Nov. 8, 2019.STEPHANE MAHE/Reuters
U.S. sales of high-margin pickup trucks and Jeeps hauled Fiat Chrysler back into the black in the third quarter following pandemic-related shutdowns, and the carmaker on Wednesday reinstated a profit forecast for 2020 that assumes no more disruption from a freshly resurgent COVID-19 outbreak.
FCA said it had available liquidity of 27.1 billion euros ($32 billion) as of September and was on track to launch three new models in its profitable Jeep lineup in 2021.
During a conference call with analysts, Chief Executive Officer Mike Manley said all the car maker’s plants are now operating near pre-pandemic production levels.
The Italian-American company had industrial free cash flow of 6.7 billion euros during the quarter, which Manley described as a “nice turnaround” to the cash burn in the first half of the year due to the pandemic.
FCA and Peugeot manufacturer PSA Group aim to merge by the end of the first quarter of 2021 and EU approval for that tie-up could come by the end of this year.
PSA on Wednesday reported a return to revenue growth in the third quarter for its autos division.
The results leave both car makers in a strong position as they steer towards their planned merger, where profits from gas-guzzling pickup trucks and Jeeps in America should help Stellantis - as the merged entity will be called - fund the development of zero-emission vehicles in Europe and China.
But a resurgence in the COVID-19 pandemic is clouding industry prospects for the coming months.
France is bracing for a possible renewed month-long lockdown and protests flared across Italy this week against a new round of government restrictions.
FCA on Wednesday posted adjusted earnings before interest and tax (EBIT) of 2.28 billion euros ($2.7 billion) for the July-September quarter, topping the 1.152 billion forecast by analysts polled by Reuters.
Operating profit rose 26 per cent to a record 2.544 billion euros in North America, with a record 13.8 per cent margin versus 10.6 per cent a year earlier.
Adjusted EBIT was slightly positive in Latin America, while the carmaker posted an operating loss in the EMEA and APAC regions and in its Maserati unit.
Milan-listed shares in FCA trimmed losses after the results were released. By 1230 GMT they were down 2.5 per cent, versus a 3 per cent fall for Italy’s blue chip index.
FCA, which earlier this year withdrew its guidance for the year, forecast a 3-3.5 billion euro adjusted EBIT for 2020, but added that its new guidance assumed no further significant disruptions from COVID-19.
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