This time China has nothing to do with it, except for the welcome surprise of the earlier than expected collection of compensation for the fire in the port of Tianjin that had damaged the group's deliveries in the Dragon Country in August 2015. Nor do they count the more or less well-founded rumors about stews or other extraordinary operations that constantly feed analyst reports on Fiat Chrysler. Indeed, once again, the press release makes no mention of forthcoming divestments or corporate operations which, if anything, will be the subject of the next industrial plan, the one which Sergio Marchionne is preparing to complete before handing over the leadership of the company (and retiring, so to speak, to Maranello)
That was enough to give comfort to the market third quarter accounts of Fiat Chrysler sufficient to justify the new leap forward of the share, up by about 70% since the beginning of the year, reaching 14,8 euros (+4,5% abundant) on strong sales volumes. The numbers show that the group is traveling in line with the objectives set for 2017 in the industrial plan:net revenues between 115 and 120 billion euros, Adjusted EBIT above €7 billion, Adjusted Net Profit above €3 billion and Net Industrial Debt below €2,5 billion. Indeed, Mediobanca Securities puts forward higher estimates: operating income of 7,4 billion euros, net income of 3,8 billion euros and net debt of approximately 2 billion euros.
In short, a promotion with (almost) full marks. The only flaw is represented by a slight drop in revenues (-2%) 26,41 billion euros), 300 million less than expected, due to the drop in Maserati deliveries, held back by the new customs rules in China. The consensus expected revenues of €26,915 billion. Overall global deliveries amounted to 1.123.000 vehicles, in line with the third quarter of 2016.
The other indications are much better. Adjusted Ebit it is up 17% to 1,758 billion euros, above consensus estimates (1,674 billion euros). The margin stood at 6,7% (+110 basis points) with all sectors improving: NAFTA (USA, Canada, Mexico) at 8%, Maserati at 13,8% and Components at 5,3%. Furthermore adjusted net profit increased by 25% to 922 million euros and net profit by 50% to 910 million euros, beyond the 836 million foreseen by the consensus. Slightly increasing net borrowing, which rose by 200 million compared to June to 4,405 billion but only due to currency fluctuations. Most of the profits remain tied to the North American market.
The most positive note concerns net income, almost doubled in the first nine months (+93%), much more than revenues (+1% to 82,058 billion) after total deliveries of 3.493.000 vehicles, in line with the previous year: the decision to sacrifice the sales of company fleets in the USA with reduced margins proved to be successful. In place of the Sedan, now out of the market, the group has focused on the Jeep and Ram SUVs as well as the success of the Alfa Romeo Stelvio. In this context, the company can hope for a full sprint end of the year. But making predictions is really complicated: The risk of fines looms over the automotive world, not just FCA on emissions or the risk of recalling models deemed non-compliant. This is the shock most feared by Marchionne, who is also skeptical about the future of the electric car.
