Fiat Chrysler's stock tanks after disappointing 2019 outlook
Rep. Warren Davidson (R-Ohio) on General Motors decision to close some of its U.S. plants and lay off workers.
Fiat Chrysler’s shares tanked on Thursday after the carmaker forecasted lower-than-expected earnings for 2019 amid an increasingly difficult sales environment in China for the atuo sector at-large.
The U.K.-based company anticipates adjusted earnings to hit as high as $7.6 billion, less than the $8.3 billion that Wall Street anticipated.
Fiat’s profits in the fourth quarter grew 61 percent to $1.8 billion, or 82 cents per share. Revenue in the three months through December increased 6 percent to $34.7 billion, supported by stronger sales in North America.
While revenue in the U.S., Mexico and Canada grew 9.5 percent, largely due to higher sales of its Ram pickup and Jeep Wrangler, sales in China fell 17 percent to $3 billion amid "trade, regulatory and competitive challenges in the weakening" region.
Carmakers globally are struggling with a slowdown in the world's must lucrative auto market. Underscoring the turmoil is the ongoing trade dispute with the Trump administration. The White House previously imposed tariffs on $250 billion in Chinese products, as well as double-digit tariffs on global imports of steel and aluminum.
Treasury Secretary Steven Mnuchin and United States Trade Representative Robert Lighthizer will reportedly travel to Beijing next week to continue discussions after Chinese officials visited Washington D.C. in January. While talks advance, key areas like the theft of U.S. intellectural property and forced technology transfer for American businesses that seek to operate in China remain unresolved.
Should an agreement not be reached, Trump says he is prepared to hike tariffs on $200 billion in Chinese imports from 10 percent to 25 percent -- as well as extend levies to an additional $267 billion in products, effectively covering all trade to the U.S. from the communist nation.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| FCAU | NO DATA AVAILABLE | - | - | - |
On Wednesday, Fiat said it would recall 882,000 Dodge Ram pickup trucks due to steering and brake pedal issues.
The company in January agreed to pay as much as $800 million in fines over allegations that it intentionally circumvented federal emissions laws. Fiat reportedly agreed to also pay $66 million in attorney fees.