Editor's note: Update corrects the converted currency figure in the second paragraph.
Fiat Chrysler Automobiles reported a net loss of $331 million (299 million euros at today’s exchange rate) in the third quarter despite a strong performance in North America and recoveries in Europe and Latin America.
FCA said it lost money because it booked a $667 million charge to its global reserves in the quarter to reflect the “current regulatory and recall environment.”
The company said the charge stemmed from an accounting change in the way it estimates "future recall costs.” FCA signaled today that the increased costs of recalls “will likely trigger pricing actions to maintain profitability.”
The third-quarter loss compares with a $208 million profit, in today’s dollars, that FCA reported during the same period a year earlier. The company is the global corporate parent of FCA US, the former Chrysler Group.
In North America, the automaker reported revenue of $19.6 billion, up 35 percent. FCA recorded shipments in North America of 685,000 vehicles, up 12 percent, and sales of 674,000 vehicles, up 7 percent.
The company said its North American adjusted profit margin was 6.1 percent, up from 4.1 percent a year earlier. Adjusted earnings before interest and taxes in the region more than doubled to $1.31 billion.
FCA said its worldwide unit shipments for the quarter were flat at 1.1 million vehicles, largely because of declines in Latin America and Asia. Jeep shipments rose 27 percent worldwide as the SUV brand’s global expansion continued.
Third-quarter global revenues rose 17 percent to $30.5 billion.
The company reported cash of $22.6 billion, up from $20.6 billion in the third quarter of 2014. FCA said it had a gross industrial debt of $34.5 billion, down from $36.4 billion at the same point in 2014.
The automaker’s U.S. sales were up 6.9 percent during the third quarter on strong demand for its pickups and SUVs.
FCA confirmed its overall guidance for the year, saying it would ship approximately 4.8 million vehicles. It is projecting net revenues of approximately $122 billion. The company said it expects to report overall profit for 2015 of approximately $1.3 billion and to have a reduced net industrial debt of $7.3 billion to $7.9 billion to reflect transactions related to the Ferrari initial public offering. Previously, the company estimated it would finish the year with net industrial debt of $8.25 billion to $8.8 billion.
