Fiat posts another profitable quarter, raises forecast
With second quarter results made all the more remarkable by the overall weakness in the European auto market, the Fiat Group blew by analysts' forecasts to post a $831.9 million quarterly profit, up 83 percent from last year's results in the same period.More important than the group result is the fact that the automotive business, Fiat Auto, posted its third consecutive quarterly profit, a healthy $111.1 million. In the same quarter a year ago, the then-struggling auto group posted a loss of $111 million. Massive restructuring of the automotive operation and the introduction of successful new models led by Fiat's Grande Punto (at right), are credited with the turnaround.
Fiat Group also raised its yearly profit forecast for 2006 Monday, to $2.3 billion.
[Sources: Reuters, Fiat Group]
Reader Comments (Page 1 of 1)
Michael Karesh 7:19PM (7/24/2006)
Good thing GM paid two billion to get out of the planned merger...
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mikesright 8:22PM (7/24/2006)
Yeah, it's not like the $2 billion they gave to Fiat helped them with the liquidity to produce the new automobiles in the lineup, and its not like Masarati is now pumping up FIAT AUTO's profits at all (they weren't in FIAT AUTO when GM was faced with the put option...
You keep amazing me with ignorance, Karesh.
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Michael Karesh 9:06PM (7/24/2006)
If you're going to charge someone with ignorance, you might want to check the facts first.
First, GM paid Fiat the $2b, or the first part of it anyway, just a bit over a year ago. Lead times being what they are, Fiat's current products, including the new ones, were already paid for or in the process of being paid for at that time. To the extent GM's money has a positive impact on Fiat's performance, it will be further down the road.
TCC article at the time:
http://www.thecarconnection.com/Auto_News/Auto_News/GM_Buys_Off_Fiat_For_2B.S175.A8121.html
One thing I hadn't realized was that not only did GM pay Fiat almost $2b, but it also gave up it's ten percent share of Fiat. What's that worth now?
Second, "Maserati" (check the spelling) and "profits" are two words you'll rarely find associated with one another. In the first quarter of 2006 it LOST 19 million Euros, and it lost another 7 million in the second quarter.
Third, these results for Fiat Auto don't include Maserati's losses. And both Maserati's AND Ferrari's results are included in the Fiat Group's overall auto results.
Details: http://www.fiatgroup.com/comuni/php/file_get.php?w=B9EP2XPH82R4BRQFAMER
So, who's ignorant?
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mikesright 11:31PM (7/24/2006)
You want to know what the #1 expense of designing a new car is? It's tooling. Fiat got the money to tool the plants and to keep the doors open from...GM.
The 10% stake was given up to pay to end the FIAT dispute, and FIAT is worth much less without Ferrari or Maserati, and besides, $110 million is pocket change to GM.
So, what were you saying about ignorance again?
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David 12:18AM (7/25/2006)
Maybe I'm in the minority, but I've always liked driving Fiats -- they were just weird and interesting. I'd love to see the Panda over here in the US market, but (as always seems to be the case with cheap desirable European cars) it's probably too small and underpowered to succeed.
"Mikesright", you might want to try citing your sources, otherwise you sound like just another goofy motorhead whose fragile ego is tied to his knowledge of all things automotive.
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Marco 3:19AM (7/25/2006)
David,
underpowered?
Check out this:
http://www.autoblog.it/post/4568/fiat-panda-sport-foto-spia
185 Kpm!!! :-D Maybe it will be a failure,but at least they've tried...
Anyway I'm happy for Fiat group,especially 'cos part of my compatriots were tired to bring money to Germans and (brrr) French...
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Pit 3:34AM (7/25/2006)
The group's view of second semester performances is more optimistic and supports an upward revision of group targets for the year.
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robbie 8:14AM (7/25/2006)
I would just like to point out to Mr. Karesh that if you're going to attack someone's spelling, you may wish to do so with proper grammer. I believe you meant the possessive "its" rather than the contractual "it's" that you chose. Try not to make snide comments about ignorance if you haven't quite gained an understanding of the language.
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robbie 8:33AM (7/25/2006)
Yes, I realized that I spelled grammar wrong. You win.
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