NEW YORK • Fiat Chrysler Automobiles NV plunged as much as 12% on a weaker than expected outlook and disappointing results in its North American stronghold, as CEO Mike Manley struggles to gain traction seven months into the job.
The forecast for €6.7 billion (RM30.98 billion) in adjusted Ebitda this year fell well below targets that ranged as much as 28% higher. The stock drop was the worst since July 25, shortly after Manley took over from a dying Sergio Marchionne.
Manley, 54, is battling issues left over from the Marchionne reign, as well as new ones that have emerged on his watch.
The Chinese market weakened substantially in the second half of the year, and investors were especially dismayed that earnings in North America missed estimates in the fourth quarter (4Q). The region is supposed to be Fiat Chrysler’s armour against weakening markets abroad, but the miss on operating profit shook analysts’ confidence that management has expenses under control.
In Asia, Fiat Chrysler swung to a loss of €296 million in 4Q. Margins in Europe were sliced in half by discounting triggered by new emissions tests, and the prospect of a messy UK exit from the European Union hasn’t helped.
North America, which provides the bulk of Fiat Chrysler’s profit, posted adjusted Ebit margin equalling 8.6% of sales in 2018, up from 7.9% a year ago. Overall, profit margins are expected to stay steady at 6.1% of sales this year. — Bloomberg
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