Fiat Industrial Profit Rises on U.S. Tractor Demand
Fiat Industrial SpA (FI), the maker of commercial and agriculture vehicles spun off from Fiat SpA (F) in 2011, said second-quarter profit rose 1 percent, boosted by higher tractor sales in North America
Trading profit, or earnings before interest, taxes and one-time gains or costs, advanced to 633 million euros ($841 million) from 627 million euros a year earlier, the Turin, Italy-based company said today in a statement. Sales increased 3.1 percent to 6.83 billion euros.
Fiat Industrial faces a slumping European market. New registrations of trucks above 3.5 tons declined 11.5 percent in Europe in the first six months of the year, according to industry association ACEA. Demand has shown signs of picking up, with truckmakers including Volvo AB (VOLVB) and Daimler AG calling for orders to pick up in the second half.
Fiat Industrial stuck to its goal of raising 2013 revenue by 3 percent to 4 percent. The forecast was lowered in April as the economic crisis in Europe cut demand for Iveco trucks.
The manufacturer’s shares rose 2.8 percent to 9.26 euros in Milan trading. The stock has gained 12 percent this year, valuing the company at 11.3 billion euros.
Fiat industrial and its CNH Global NV (CNH) farm-equipment division plan to merge in a move aimed at improving growth prospects by shifting focus to the U.S. CNH, the maker of Case and New Holland bulldozers and tractors, is 88 percent-owned by Fiat Industrial. Shareholders at both manufacturers approved the deal earlier this month.
The new company, which will be called CNH Industrial, will have its primary listing on the New York Stock Exchange, with the company expecting shares to be trading by the end of September. CNH Industrial will be legally incorporated in the Netherlands and based in the U.K. for tax purposes.
Fiat Industrial Chairman Sergio Marchionne, who will be president of the new company, is seeking to shift the manufacturer away from its roots in Italy, which is in its fourth recession since 2001.
The combination will create the world’s third-largest capital-goods company with a product line spanning Iveco delivery trucks, New Holland harvesters and FPT ship engines.
Both Fiat Industrial and Fiat are controlled by Exor SpA (EXO), the investment company of Italy’s Agnelli family. Exor has said it plans to keep voting rights in CNH Industrial above 30 percent.
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