Could we expect more cash now??:eyebrows:
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Fiat First-Quarter Profit More Than Doubles on Cars
April 23 (Bloomberg) -- Fiat SpA, Italy's biggest manufacturer, said first-quarter profit more than doubled as the company boosted productivity and sold more cars and trucks.
Net income increased to 358 million euros ($486 million), or 27 cents a share, from 138 million euros, or 11 cents, a year earlier, Turin, Italy-based Fiat said in an Italian stock exchange filing today. Profit beat the 248.2 million-euro median estimate of five analysts surveyed by Bloomberg News. Sales rose 8.9 percent to 13.7 billion euros.
Fiat, Europe's fastest-growing carmaker by sales in 2006, began selling the Bravo compact car in February to challenge models including Volkswagen AG's Golf and Renault SA's Megane. Chief Executive Officer Sergio Marchionne, who restored profit in 2005 after years of losses, has updated the product line, cut spending and created a new management team.
The figures ``strengthen once more the credibility of the work Marchionne is doing,'' said Gianmaria Bergantino, head of asset management at Bank Insinger de Beaufort NV in Rome, who helps manage about $400 million in assets, including non-voting stock in the carmaker. ``Fiat is doing a great job of reducing costs and maximizing productivity.''
Shares of Fiat rose as much as 42 cents, or 2.1 percent, to 20.90 euros, the highest since Sept. 10, 2001, and were up 1.8 percent at 20.84 euros at 2:34 p.m. in Milan. The stock has advanced 44 percent this year, valuing the company at 26.3 billion euros.
"The stock could reach 22 euros in the short term,'' Bergantino said.
Earnings before interest and taxes as a proportion of sales increased to 4.4 percent from 2.6 percent. The cost of goods sold increased 7.8 percent in the quarter, Fiat said.
Bravo orders topped 29,000 cars in the first two months of availability, while 11,000 of the model were delivered in the first quarter, the company said. Total sales of Fiat group cars and light trucks, including the Alfa Romeo and Lancia car brands, increased 12 percent in the quarter to 541,200 vehicles, a six- year high, Fiat said.
The carmaker's 2006 European sales surged 17 percent to 1.16 million vehicles, led by the Grande Punto hatchback introduced in September 2005. Fiat's European market share grew to 7.5 percent in 2006 from 6.5 percent in 2005, and to 8.3 percent in the first quarter of this year from 7.8 percent a year earlier, according to European Automobile Manufacturers Association figures.
Fiat expects to increase profit by more than 60 percent in 2007 as new models attract buyers, Marchionne said April 5 at the annual shareholders meeting. Fiat will present an updated version of the classic Cinquecento small car in July.
"The Group is confirming 2007 guidance at the upper end of the indicated range,'' Fiat said in the statement. The company aims to raise net income to 1.6 billion euros to 1.8 billion euros in 2007, with an operating profit of 2.5 billion euros to 2.7 billion euros.
Net debt as of March 31 fell to less than 1.3 billion euros, a reduction of about 500 million euros since the end of 2006. Fiat expects less than 1 billion euros in debt by the end of the year, the company said.
First-quarter operating profit surged 84 percent to 595 million euros, as earnings at the auto unit, including the Ferrari and Maserati brands, more than doubled to 222 million euros.
Iveco SpA, Fiat's truck-making unit, had operating profit of 150 million euros, more than double a year earlier. Tractor-maker CNH Global NV's profit more than doubled to $95 million and sales increased 9.9 percent, the company said today in a separate statement. Operating profit at Fiat's component and robot maker units was little changed at 83 million euros.
Marchionne has promoted Fiat globally by signing alliances with other carmakers, including India's Tata Motors Ltd. and Japan's Suzuki Motor Corp. Fiat brands also have gained visibility through sponsorship of athletes and teams such as soccer's Juventus SpA and New Zealand's All Blacks rugby team.
Bloomberg