MILAN/LONDON (Reuters) – U.S. sales of high-margin pickup trucks and Jeeps hauled Fiat Chrysler <FCHA.MI> <FCAU.N> back into the black in the third quarter following pandemic-related shutdowns, and the carmaker on Wednesday reinstated a profit forecast for 2020 that assumes no more disruption from a freshly resurgent COVID-19 outbreak.
FCA said it had available liquidity of 27.1 billion euros ($32 billion) as of September and was on track to launch three new models in its profitable Jeep lineup in 2021.
During a conference call with analysts, Chief Executive Officer Mike Manley said all the car maker’s plants are now operating near pre-pandemic production levels.
The Italian-American company had industrial free cash flow of 6.7 billion euros during the quarter, which Manley described as a “nice turnaround” to the cash burn in the first half of the year due to the pandemic.
FCA and Peugeot manufacturer PSA Group <PEUP.PA> aim to merge by the end of the first quarter of 2021 and EU approval for that tie-up could come by the end of this year.
PSA on Wednesday reported a return to revenue growth in the third quarter for its autos division.
The results leave both car makers in a strong position as they steer towards their planned merger, where profits from gas-guzzling pickup trucks and Jeeps in America should help Stellantis – as the merged entity will be called – fund the development of zero-emission vehicles in Europe and China.
But a resurgence in the COVID-19 pandemic is clouding industry prospects for the coming months.
France is bracing for a possible renewed month-long lockdown and protests flared across Italy this week against a new round of government restrictions.
FCA on Wednesday posted adjusted earnings before interest and tax (EBIT) of 2.28 billion euros ($2.7 billion) for the July-September quarter, topping the 1.152 billion forecast by analysts polled by Reuters.
Operating profit rose 26% to a record 2.544 billion euros in North America, with a record 13.8% margin versus 10.6% a year earlier.
Adjusted EBIT was slightly positive in Latin America, while the carmaker posted an operating loss in the EMEA and APAC regions and in its Maserati unit.
Milan-listed shares in FCA trimmed losses after the results were released. By 1230 GMT they were down 2.5%, versus a 3% fall for Italy’s blue chip index <.FTMIB>.
FCA, which earlier this year withdrew its guidance for the year, forecast a 3-3.5 billion euro adjusted EBIT for 2020, but added that its new guidance assumed no further significant disruptions from COVID-19.
(Reporting by Giulio Piovaccari; editing by Jason Neely and Keith Weir and Kirsten Donovan)
