Fiat Chrysler (FCAU) Stock Falls Amid Uncertainty Despite Guidance Hike
NEW YORK (TheStreet) -- Shares of Fiat Chrysler Automobiles (FCAU) - Get Report are sliding 4.36% to $6.70 in late-afternoon trading on Wednesday despite hiking its full-year financial targets.
Before the market open, the Italian-American car maker boosted its revenue outlook by 2 billion euros to 112 billion euros and its adjusted operating profit to 5.5 billion euros from 5 billion euros.
But analysts have pointed out that the revised numbers are near where the consensus estimates already were, Reuters reports.
In all, the company said second-quarter sales declined 2% to 27.89 billion euros, below expectations of 29.3 billion euros. Adjusted operating profit rose 16% to 1.63 billion euros ($1.8 billion), in line with analysts' estimates of 1.64 billion euros.
The company's margins in North America increased to 7.9% this quarter from 7.7% a year ago, but the improvement was less significant than in previous quarters.
"Free cash flow was a touch better than anticipated, yet FCA's net debt remains elevated," George Galliers, an analyst at Evercore ISI, told Reuters. "Rightly, investors may be concerned given the fact that North American earnings growth would appear to be plateauing."
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.
Fiat Chrysler's strengths such as its increase in net income, revenue growth and growth in earnings per share are countered by weaknesses including weak operating cash flow, disappointing return on equity and poor profit margins.
You can view the full analysis from the report here: FCAU
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