Fiat Chrysler Automobiles reported first-quarter earnings on Tuesday, and they were better than expected thanks to the continued strength of the truck and SUV market in the US.
“FCA also confirmed its full-year guidance, but higher debt disappointed, pushing shares lower,” Reuters reported.
According to Reuters, “[a]djusted operating profit for the January-March period rose to 1.38 billion euros ($1.56 billion) from 700 million the previous year and compared with an analyst consensus of 1.17 billion euros in a Thomson Reuters poll.”
Sales of pickup trucks and SUVs have helped the US auto market surge to a record high in 2015. Last year, 17.5 million new vehicles rolled off dealers lots, and many of them were the SUVs that help automakers bank higher profits.
A debate has broken out on the industry about how long the good times can last. But for now, FCA is one of the winners, with its Ram and Jeep brands.
Debt continues to be an issue for FCA. It “rose to 6.6 billion euros at the end of March from 5.05 billion euros three months earlier, impacted by seasonality and currency effects,” Reuters reported.
CEO Sergio Marchionne seems to sceptical about FCA’s ability to ride out a future downturn. For the past year, he has been actively courting merger partners, but has been rebuffed by General Motors, more recently, Ford.