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Fiat profits plunge after US tax charges

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Fiat profits plunge after US tax charges
Despite the profits plunge, Fiat held to its forecasts for the year. Photo: Geoff Robins/AFP
13:29 CEST+02:00
Italian car maker Fiat, which is merging with US group Chrysler, said net profit more than halved in the second quarter, undermined by a higher tax charge in the United States.

Net profit in the first three months of 2014 was €197 million, down 54.7 percent from the equivalent figure last year. Operating profit fell by 10.4 percent to €961 million, even though sales rose by 5.0 percent to €23.3 billion.

The news sents Fiat shares down 1.51 percent in Milan, while the broader index was largely flat. The group said it had reduced net debt by €300 million in the quarter to €9.7 billion. 

But despite the profits plunge, Fiat held to its forecasts for the year. It is targeting net profit of €600-800 million and sales of €93 billion.

It expects operating profit to turn out at €3.6-4.0 billion, and debt to be €9.8-10.3 billion.

Fiat, which took full control of Chrysler in January, has called a shareholders' meeting for Friday to approve a full merger of the two groups. The new entity would be called Fiat Chrysler Automobiles (FCA).

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