Italy's Fiat posted a better-than-expected first-quarter profit on higher sales and confirmed its targets for the year despite weaker demand for cars, trucks and tractors, sending its shares higher. "Our portfolio of activities will enable us to offset the associated negative impact on profits," a statement said on Thursday. "We are therefore confirming our ... objectives."
Those targets include a higher trading profit of up to 3.6 billion euros ($5.74 billion). Its shares were up 3.59 percent at 14.03 euros compared with a 1.13 percent drop in the DJ Stoxx European autos sector index.
Although Fiat's chief executive, who has seen a brisk recovery of the group in a matter of a few years, has said he would look at possibly raising the objectives, one analyst remained sceptical. "Conditions are bad in the car market." The analyst's description was confirmed by Fiat when it said in the statement that sales had fallen sharply in markets like Italy and Spain, citing a slower economy.
But the decline was offset by strong demand in other important markets like France, Germany and especially Brazil where Fiat has a big presence. The popularity of its 500 and Panda city cars also helped, leading to a stronger quarterly sales increase than the one reported by French rival Renault on Monday."A tough quarter handled with aplomb," Morgan Stanley said in a research note.