MILAN -- Fiat Chrysler said strong profit margins in North America helped lift adjusted earnings by 13 percent in the third quarter while reducing its forecast for how much cash it will have on hand at the end of the year.

Earnings before interest and tax (EBIT) rose 13 percent to $2.27 billion, the company said in a news release Tuesday.

Sales rose 9 percent to $32.7 billion.

FCA confirmed its operating guidance for the full year. However, its forecast for net cash was reduced to between $1.7 billion to $2.27 billion from around $3.4 billion.

The company had other good news to report: Its highest North American profit margins ever and resurgent profit in Latin America.

In Europe and Asia, however, results turned to a loss. With a charge related to diesel litigation, net profit fell by 38 percent.

In North America the adjusted EBIT margin was 10.2 percent, exceeding the record 8.4 percent figure posted in the second quarter of 2017. The gains are an outgrowth of Fiat Chryslers January 2016 decision to ditch production of conventional cars in the U.S. and focus on more profitable trucks and SUVs.

FCA recorded a 700 million euro charge for diesel issues, as well as a Justice Department investigation in the U.S. The company said the charge is an "estimate of provisions" it reported because of accounting guidelines and not "an admission of liability."

The automaker promised to pay 2 billion euros in extraordinary dividends using proceeds from the sale of its Magneti Marelli parts unit. FCA last week agreed to a deal to sell Magneti Marelli to Japans Calsonic Kansei for $7.1 billion.

Bloomberg contributed to this report.

Source: Autonews

October 30, 2018