Fiat Chrysler second-quarter operating profit hit by recall costs

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[July 27, 2016]  MILAN (Reuters) - Fiat Chrysler Automobiles (FCA) on Wednesday reported a 14 percent drop in second-quarter operating profit after charges related to recall costs and capacity shifts in North America, sending its shares more than 3 percent lower.

Shares in the company turned negative after results and were down 2.3 percent by 1136 GMT.

Excluding the one-off charges, the world's seventh-largest carmaker said adjusted operating profit for the April-June period rose 16 percent to 1.63 billion euros ($1.79 billion), roughly in line with an analyst consensus of 1.64 billion euros in a Reuters poll.

Sales fell 2 percent to 27.89 billion euros and came below expectations of 29.3 billion euros.

FCA, which spun off luxury unit Ferrari at the start of this year, said net industrial debt fell to 5.5 billion euros by the end of June from 6.6 billion euros three months earlier, helped by strong cash generation from operations.

The carmaker raised its full-year guidance for revenues and adjusted operating profit due to the strong performance in the first six months but kept its debt projection intact.

(Reporting by Agnieszka Flak and Bernie Woodall)

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