Italian industrial group Fiat posted a narrower third-quarter operating loss on Thursday, boosting its shares although its core car arm fell short of analysts' consensus forecast.
More lively sales of tractors and trucks helped Fiat narrow its operating loss to 97 million euros ($124 million) from 285 million a year ago. Eleven analysts polled by Reuters had expected a loss of 106 million euros, according to the median forecast.
Fiat Auto, which makes up some 42 percent of group sales, made a loss of 270 million euros against 314 million in the third quarter of 2003. Analysts had expected the 105-year-old carmaker to lose 250 million euros.
"Auto is slightly below expectations but it's still not too bad. They've made progress and that's something," said an autos analyst in Milan who declined to be named.
Fiat shares gained on the results and by 1155 GMT were trading 2.4 percent higher at 5.64 euros. Fiat's 2011 bonds rose a quarter percentage point at 97.75 percent of face value on "relief the results were not worse", a bond trader said.
Fiat was dragged into its worst ever crisis in 2002 by a slump in car sales and high restructuring costs, especially at its tractor and bulldozer arm CNH Global which was integrating a merger just as the world economy slowed.
But CNH led the charge to limit Fiat's losses in the third quarter, more than tripling its operating profit to 90 million euros. Truck unit Iveco also glowed with an operating profit of 76 million euros against a loss of 2 million a year ago.
The agricultural equipment and truck markets have been rebounding this year but Fiat's core European car market has been stagnant and rivals are cutting prices heavily to win buyers - a margin-crimping strategy Fiat can ill afford.
Europe's largest carmaker Volkswagen, which is trying to freeze workers' wages to help cut costs, partly blamed price pressure for a 23 percent fall in its quarterly profit.
Fiat, in a statement, reiterated that Fiat Auto should narrow its operating loss in 2004 and said Iveco and CNH should continue to improve profitability. Fiat Auto's CEO has said the unit will not manage to halve its operating loss this year, as previously hoped.
Fiat reiterated that it should break even at group operating level this year. Fiat Auto is due to push into profit in 2006, under the group's turnaround plan.
Fiat's third-quarter net loss widened to 554 million euros from 84 million a year ago, when the bottom line got a 781 million euro boost from the sale of its aviation arm Fiat Avio.
Group revenues rose 8.2 percent to 10.648 billion euros while turnover at Fiat Auto rose 8.1 percent to 4.491 billion euros, thanks to new models. In unit terms, sales were up 11 percent to 402,500 cars and vans.
Net debt was 5.5 billion euros at the end of September, up from 4.3 billion at the end of June, which Fiat linked partly to a 700 million euro decrease in trade receivables sold. Gross debt was 20.6 billion euros.
Fiat's liquid cash and marketable securities shrank to 4.6 billion euros from 6.9 billion at end-June, mostly due to Fiat paying back 1.8 billion euros worth of loans.
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