Fiat Chrysler Automobiles NV’s North American unit said first-quarter earnings fell 36 percent because of a change in its tax status.
Adjusted profit declined to $312 million from $486 million a year earlier, FCA US, the former Chrysler Group, said in a regulatory filing Thursday. The earnings on that basis exclude a $2.28 billion deferred tax benefit. Revenue climbed 10 percent to $20.9 billion.
Fiat Chrysler has relied on North American operations, where sales volume has risen for 61 straight months, to overcome weakness in Europe, which returned to profit only in the past two quarters. FCA US first-quarter vehicle sales in its home market gained 6.3 percent, as a 23 percent surge for Jeep helped the unit outpace the industry’s 5.6 percent increase.
Chief Executive Officer Sergio Marchionne is pushing the auto industry to consolidate as a way to increase profitability. Other automakers have yet to take the cue, as booming sales in the U.S. and Europe are easing pressure to restructure.
The U.S.-based unit’s modified earnings before interest, taxes, depreciation and amortization for the quarter rose 10 percent to $1.4 billion, according to the filing by Auburn Hills, Michigan-based FCA US. Net income was $2.58 billion, compared with a $690 million net loss a year earlier.
The parent company last week reported that earnings before interest and taxes excluding one-time items rose to 800 million euros ($902 million) from 655 million euros a year earlier. Revenue increased 19 percent to 26.4 billion euros, though the gain was just 4 percent excluding currency effects.
The dollar’s gain versus the euro enhances the margin coming from U.S.-made SUVs and trucks when the company converts those earnings into euros. The euro tumbled about 19 percent against the dollar in the 12 months through May 6. Still, profit margins in the region remain “far below” General Motors Co. and Ford Motor Co., said Max Warburton, an analyst at Sanford C. Bernstein Ltd.
Fiat Chrysler rose 3.5 percent to $14.83 at the close in New York. The shares have gained 28 percent this year.