The low margins of Fiat Chrysler Automobiles and it high leverage position might have taken a toll on its stock in 2Q16. The company is now trading at massive YTD losses. FCAU reported adjusted EPS (earnings per share) of 0.45 euros in 2Q16, or $0.51, which is about 55% higher than its adjusted EPS in 2Q15.
This figure was also higher than the analysts’ estimate of 0.39 euros, or $0.43. However, on the day of its 2Q16 earnings release, the company’s stock fell 4.3%. Stagnation in the company’s 2Q16 revenues and shipments, along with concerns over the growth potential of US auto demand, could be what triggered this selling spree on Wall Street. Fiat Chrysler's 3Q16 adjusted EPS is predicted to be at around 0,36 euros, or about $0.40, as compared to 0.20 euros, or about $0.22 in 3Q15
Notably, US demand for pickups and utility vehicles remained strong in 3Q16, and in this segment, FCAU’s established brands Jeep, Dodge, and Ram could help the company to boost its 3Q16 earnings. US automakers General Motors and Ford Motor as well as Japanese auto giant Toyota Motor have benefited from this positive trend. Continue to the next part for a look at what analysts are recommending for Fiat Chrysler’s stock ahead of its 3Q16 earnings.
