Fiat Chrysler raises revenue forecasts after second quarter profits increase

Vehicle maker giant Fiat Chrysler Automobiles (FCA) said Thursday its second-quarter profits were up by nearly 70 percent year on a year earlier, and it was raising its 2015 revenue forecast.

The rosy results come after the carmaker reached agreement with safety regulators to pay millions of dollars in penalties for delays in almost two-dozen recalls.

FCA said net profit was 333 million euros ($364 million), up sharply from 197 million euros in the same period in 2014, and it was subsequently raising its revenue outlook for this year from 108 billion euros to 110 billion euros.

The company anticipates worldwide shipments for 2015 to be about 4.8 million units, compared to prior estimate of 4.8 to 5.0 million units.

FCA left unchanged its guidance on adjusted net profit ($1.1 to $1.3 billion) and net industrial debt ($8.22 to $8.77 billion). The company’s Milan-listed shares (this is the secondary listing, the primary one is on the New York Stock Exchange) registered a massive plunge at the start of the week and had to be suspended because of the latest worries about the impact of recalls announced in the United States most recently.

The Italian American automaker had said earlier this week that it had repaired 67 percent of about 578,000 eligible mostly trucks for a buyback in three recall campaigns – meaning about 193,000 could be bought back. It must pay a $70 million civil fine, plus make $20 million in safety-related improvements.

CEO Sergio Marchionne said the company will pay the $70 million shortly, and said the buyback costs can be included in the $20 million.

The company’s total revenues in the quarter grew 25 percent to €29.2 billion, or about $32 billion. “That’s not an excuse and we must and will do better about this”, he said.

The carmaker said North American sales volumes were up 8 percent, boosted by the Jeep Renegade and new Chrysler 200, pushing net revenues in the region up by 40 percent. European volumes were up 12 percent, with revenue up 19 percent. Marchionne also has been vocal about the need for consolidation in the industry, but hasn’t yet found a partner. Ferrari revenues grew 5 percent to 766 million euros, while Marerati revenues declined 17 percent to 610 million euros from a year ago.