Fiat 2Q loss of euro168 million

[July 22, 2009]  MILAN (AP) -- Italian automaker Fiat on Wednesday reported a second-quarter loss of euro168 million ($238 million) due to a steep decline in sales from a year ago -- especially of trucks and commercial vehicles.

The second-quarter net loss of euro168 million compares with a net profit of euro604 million in the same period of last year. It was an improvement, however, from the first-quarter net loss of euro578 million.

Fiat, which last month took a controlling stake in U.S. automaker Chrysler, said incentives for people to scrap old cars and buy new ones in some European countries boosted lagging car sales, narrowing losses compared to the first quarter.

Turin-based Fiat, which makes cars under the Fiat, Lancia and Alfa Romeo brands, said revenues in the quarter were down 22.5 percent, or euro13.2 billion ($18.7 billion), compared with euro17 billion in the same period last year.

"The global economic crisis continued to have a significantly negative impact on demand levels for all the group's business, but with signs of improvement in certain markets compared with Q1 levels," Fiat said in a statement.

Fiat maintained its forecast of trading profits above euro1 billion ($1.36 billion) and debt levels below euro5 billion.

Fiat shares fell 2.5 percent in Milan trading to euro7.74 ($11.99).

Sales of its Iveco brand trucks suffered especially in the economic downturn, sliding 43 percent from a year earlier to euro1.8 billion from euro3 billion. Revenues in the agriculture equipment business, Case New Holland, were down 21 percent to euro2.9 billion, compared with euro3.6 billion in the same period a year earlier.

Fiat Group Automobile revenues, which make up about 40 percent of Fiat's business, were down 11 percent due to the contraction in the global auto market. Fiat noted that its strong offering of environmentally friendly vehicles helped stanch losses, with passenger car deliveries of 514,600 units, a decrease of just 1.3 percent compared with the same quarter a year earlier.

Fiat said the declines were in all businesses, but said the results showed some improvement over the first quarter of this year, when it reported a net loss of euro578 million.

[Associated Press; By COLLEEN BARRY]

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