Fiat Industrial lifts outlook after Q2 profit rise
MILAN (AP) — Fiat Industrial, the Italian maker of trucks, farm and construction vehicles, raised its 2011 earnings forecasts Monday after second-quarter profits soared 78 percent on higher sales volumes across all sectors.
Fiat Industrial SpA posted a second-quarter net profit of euro212 million ($304.86 million), compared with euro119 million a year earlier. Net revenues rose 10.6 percent to euro6.28 billion from euro5.67 billion.
Trading profit — or earnings before interest, taxes and one-time items — rose 53 percent to euro530 million, exceeding analysts' consensus forecast of euro445 million.
Investors cheered the figures, sending Fiat Industrial shares 5.4 percent higher to euro9.47 at the close of Milan trading.
The company said that its raised earnings forecasts were for revenues of euro24 billion this year, up from the euro22 billion predicted earlier, and trading profit above euro1.5 billion, from a maximum of euro1.4 billion.
"We are quite optimistic about our business," Fiat Industrial Chairman Sergio Marchionne told a conference call. "We are going to revisit these numbers at the end of Q3 to see if we are going to upgrade them."
Fiat Industrial SpA spun off from Fiat Group earlier this year, and the 2010 data were derived from Fiat consolidated statements last year.
By sector, Fiat Industrial said its agricultural and construction equipment unit CNH, posted a 45 percent increase in trading profit to euro381 million on higher volumes and prices and a better mix.
The Iveco trucks division saw its trading profit spike from euro50 million to euro135 million, reflecting improved leveraging on higher volumes. Revenues were up 16 percent to euro2.4 billion, as Iveco delivered 40,568 vehicles worldwide, an 18 percent increase over the same quarter a year earlier. Deliveries were up 12 percent in Western Europe.
CNH in April announced plans to establish a manufacturing site in Argentina to produce tractors and combines for the Latin American market, creating some 600 jobs at the plant and 1,500 jobs in related industries.
Marchionne said the Cordoba plant will cost over $100 million, allowing CNH to produce large combines in Latin America.