Fiat Chrysler U.S. posts second-quarter $598 million profit, down 3.4%

DETROIT — Second-quarter earnings at Fiat Chrysler Automobiles’ U.S.-based subsidiary fell despite higher revenues and vehicle shipments.

FCA US reported net income of $ 598 million for the quarter. A year earlier, the company, then known as Chrysler Group, netted $ 619 million.

The company took a one-time charge of $ 90 million in the latest quarter as part of its sweeping consent order with the National Highway Traffic Safety Administration over safety and recall practices, and a $ 71 million loss to retire debt.

The U.S. subsidiary’s results dwarf the $ 364 million in global profits that parent company Fiat Chrysler Automobiles NV reported last week. However, the parent company doesn’t report net income by region or by subsidiary. The FCA US results include North American profits as well as international results and are calculated using U.S. GAAP instead of the IFRS accounting standards used by its parent company.

FCA’s U.S. results include North American profits as well as overseas results and are calculated using U.S. accounting practices instead of international financial reporting standards.

Second-quarter revenue at the U.S. arm rose 11 percent to $ 22.6 billion on record sales of Jeep SUVs and continued strong demand for Ram pickup trucks and the Chrysler 200 sedan. The automaker’s streak of year over year monthly U.S. sales gains reached 64 months when July results were reported Monday.

U.S. modified operating profit in the second quarter was $ 1.4 billion, or 6 percent of net revenue, and an increase of 37 percent from modified operating profit of $ 985 million, or 4.8 percent of revenue, in the second quarter of 2014. The company said the latest results reflect “higher vehicle shipments, improved net pricing, and purchasing efficiencies” that were partially offset by “higher base material costs for vehicle content enhancements.”  

The U.S. subsidiary said worldwide vehicle shipments rose to 780,000 in the quarter, up 7.3 percent. The company said global sales rose 5.4 percent to 762,000 in the quarter compared to the same period a year ago.

The company ended the quarter with $ 11.7 billion in cash, down from $ 13.8 billion on March 31, largely reflecting the prepayment of debt.

You can reach Larry P. Vellequette at lvellequette@crain.com.


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