FILE - In this Friday, May 21, 2010 file photo, Chrylser CEO Sergio Marchionne, left, is seen with Jeep brand President and CEO Mike Manley at the Jefferson North Assembly Plant, in Detroit. Fiat Chrysler's board recommends Jeep executive Mike Manley to replace seriously ill CEO Sergio Marchionne, Saturday, July 21, 2018. (AP Photo/Carlos Osorio, File)

Fiat Chrysler profits sink in last quarter under Marchionne

July 25, 2018 - 5:00 am

MILAN (AP) — Fiat Chrysler Automobiles on Wednesday lowered its full-year targets after second-quarter profits sank 35 percent, but the carmaker confirmed it had eliminated net industrial debt, as promised by late CEO Sergio Marchionne.

Fiat Chrysler announced its earnings shortly after the news of the death of long-time CEO Marchionne, who was hastily replaced over the weekend after a sudden deterioration in health. The new CEO, Mike Manley, later presents the results to the financial community in his debut as global boss.

Despite a record quarter in North America, Fiat Chrysler reported second-quarter profits dropped to 754 million euros ($881 million) from 1.15 billion euros a year earlier. It cited problems in China, including import duties that hurt sales of its luxury Maserati nameplate, increased competition from domestic brands and lower shipments from the Chinese joint venture.

As a result, the Italian-American company lowered its full-year earnings target to a range of 7.5 billion euros to 8 billion euros, from 8.7 billion euros previously. The balance sheet also showed net industrial cash of 456 million euros.

North America continued its role as profit-driver, generating 85 percent of the company's 1.65 billion earnings before interest and taxes. The performance was driven by higher volumes of the new Jeep Wrangler, Cherokee and Compass as well as Dodge Journey, as the company continued to reap the benefits of the shift to SUVs and away from passenger cars.

The Asia region swung to a loss of 98 million euros while Maserati profits were nearly wiped out, dropping to 2 million euros from 153 million euros a year earlier. European earnings sank 6 percent, to 188 million euros, largely due to lower net pricing.

Latin America turned in 6 percent of the automaker's profits, with a nearly 70 percent increase in earnings, to 101 million euros.

Overall, Fiat Chrysler reported a 6 percent increase in shipments to 1.3 million, boosting revenue by 4 percent to 29 billion euros ($34 billion).

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