Fiat profits jump on construction equipment sales
Italian industrial group Fiat has reported a seven-fold jump in profits, after surging farm and building equipment orders offset flat car sales.
The company made 190m euros ($266m, £169m) net profits in the last three months, up from 25m euros a year ago.
Revenues at its agricultural and construction unit jumped 32%, whereas those at its car business were unchanged at 7bn euros.
Fiat plans to split into separate car and non-car businesses in January.
The demerger is expected to take place on 1 January 2011, and the company is expected to seek shareholder consent for the move on 16 September.
Existing shareholders will receive proportionate ownership of the two new companies.
The non-car company, to be named "Fiat Industrial", will take over the group's assets in the truck, industrial and marine powertrain, and agricultural and construction equipment businesses.
Building and developing
Fiat Group's overall revenues were up 11.9%, according to its third quarter release.
The company raised its full-year revenue forecast for the second quarter running, by 10% to 55bn euros.
It also doubled its full-year profit guidance to 2bn euros.
Construction equipment orders were up 47% on a year ago, led by heavy equipment, with demand strongest in developing markets in Latin America and Asia.
Agricultural equipment orders were also up, with combine harvester sales rising 6%, but tractor sales fell slightly.
Fiat's car components business also did well, increasing its revenues for the quarter 23% versus a year ago, while those at its truck unit - Iveco - were up 15%.
Vans and Maseratis
However, revenues at its automobiles unit were hit by a 25% drop in passenger car sales in Europe.
Among the worst individual markets were Germany, Italy and the UK, all down by between 30% and 40% compared with a year ago.
But the impact was balanced by a rise in orders for higher value vans and other commercial light vehicles.
Meanwhile, Fiat's luxury car lines both reported surging sales, with Maserati up 44% and Ferrari up 13% for the quarter.