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FCA Plans to "Outperform Ford in 2018"

FCA Plans to "Outperform Ford in 2018"

Fiat Chrysler Automobiles is currently the only leveraged automaker in the world, but it isn’t stopping it from having some lofty goals this year. The company is planning to “outperform Ford” when it comes to earnings this year, something that would have been unbelievable even a few years ago.

CEO Sergio Marchionne may have solid reasoning behind his goal. During FCA’s recent fourth-quarter earnings call the company announced a near doubling of its Q4 earnings to about $1 billion. The increase was largely driving by a one-percent increase in its operating margin in North America; the region with the highest contribution to FCA’s profitability.

FCA expects that 7.9 percent operating margin in North America to continue to rise in 2018 thanks to the launch of profitable new models, such as the 2019 Ram 1500 and Jeep Wrangler JL.

Concurrently, FCA is estimating it will be debt-free by mid-year. This will mark the first time the company has been debt-free since emerging from bankruptcy in 2009. Right now FCA is the only major automaker with more debt on the books than cash. Once the company turns cash positive later this year, it will have a little more financial flexibility.

FCA’s projecting annual earnings of $10.8 billion for 2018, which could mean FCA will overtake Ford this year in terms of net income, but FCA says that is not their focus.

The automaker will become debt-free just as Marchionne announces his new five-year business plan. The plan will be presented in Balocco, Italy on June 1st. Marchionne will be retiring early in 2019.

 





 

About Nick Saporito

AutoVerdict Senior Editor Nick Saporito began writing about cars at age 13. Nick ran a couple of automotive enthusiast sites for several years, before taking some time off to focus on his career and education. By day he's a marketing executive in the telecom world and by night he hangs out here at AV. You'll find him focusing on tech, design and the industry's future.
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