Fiat third-quarter profit up 1.8 percent

Automaker Fiat Group SpA said Wednesday its net profit rose 1.8 percent in the third quarter, with gains in its auto, agriculture and construction-equipment units offsetting weakness in other divisions. But its shares fell sharply after it said sales could drop 20 percent next year.

The Turin-based maker of maker of Fiat, Lancia and Alfa Romeo cars said its third-quarter net profit was euro440 million ($565.09 million) up from euro432 million in the year-ago period.

Fiat shares were suspended from trading early Thursday for excessive losses. Shares dropped 5.2 percent in early trading on the Milan Stock Exchange to euro6.20 ($7.96).

The once failing automaker said it was its 15th consecutive quarterly profit. Group revenues rose 3.2 percent to euro14.30 billion (US$18.45 billion) from euro13.86 billion a year ago.

Revenues were up 3.2 percent in the group's auto division. It said lower volumes in Western Europe and higher selling expenses associated with the launch of new models were offset by the Brazilian market's strong performance and a better product mix.

Its agriculture and construction-equipment unit saw revenues rise 10.1 percent in the third quarter, but its trucks and commercial vehicles business saw revenues slip 6.2 percent.

The company also confirmed its 2008 targets and outlined a "worst-case" scenario for 2009 in which sales drop up to 20 percent from this year's levels. Auto companies around the world are trimming production and bracing for a rough year due to the anticipated effects of the world financial crisis on the wider economy.

Fiat said it expected the rest of 2008 to see reduced volumes compared with original expectations in all its units, with the exception of agricultural equipment. But it said it was confirming its forecast for operating profit for the year at the low end of a range of euro3.4 billion to euro3.6 billion euros ($4.39 billion to $4.64 billion)

For next year, it outlined a worst-case scenario of global demand for Fiat products declining between 10 percent to 20 percent compared to 2008. It said the resulting net profit range for the group would be euro1.20 billion and euro400 million.