Fiat raises 2010 forecasts on tractors, trucks sales

Fiat SpA raised its 2010 forecasts after quarterly profit beat analysts’ estimates on sales of Iveco trucks and Case New Holland tractors. The shares jumped to the highest level in more than two years in Milan.

Full-year earnings before interest, taxes and one-time items will be at least 2 billion euros ($2.8 billion), from a previous target of as much as 1.2 billion euros, the Turin, Italy-based carmaker said today. Third-quarter net income reached 170 million euros, surpassing the 42 million-euro average estimate of analysts surveyed by Bloomberg.

Chief Executive Officer Sergio Marchionne, who also runs Chrysler Group LLC, is spinning off Fiat’s industrial units to focus on reviving carmaking operations. Italy’s largest manufacturer led a sixth consecutive monthly decline in European car sales in September as demand wanes after government incentives expired, industry figures showed.

“Results delivered by the auto business are better than expected,” said Erich Hauser, an analyst at Credit Suisse. “Despite a decline in unit sales, Fiat managed to show flat year on year revenue, helped by an exchange rate that favored Fiat in Brazil.”

Two-Year High

Fiat rose 52 cents, or 4.4 percent, to 12.24 euros, the highest price since June 2008, in Milan trading. The stock has advanced 19 percent this year, compared with a 22 percent gain in PSA Peugeot Citroen and a 44 percent advance in Volkswagen AG, Europe’s largest carmaker.

Earnings before interest, taxes and one-time gains or losses, which Fiat calls trading profit, rose 90 percent to 586 million euros, topping the 409 million-euro average estimate of analysts. Nine-month trading profit more than doubled to 1.59 billion euros.

Full-year sales will top 55 billion euros from an earlier forecast of more than 50 billion euros, Fiat said today. Third- quarter revenue climbed 12 percent to 13.5 billion euros. Full- year net income will be about 400 million euros instead of an earlier projection for break-even, Fiat said.

Group sales may increase to 59 billion euros and trading profit to as much as 2.6 billion euros in 2011, according to the company’s business presentation in April.

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