DETROIT _ Fiat Chrysler Automobiles on Thursday reported its best earnings since the company fully merged into a single automaker in 2014, showing the company is well on its way to completing a five-year restructuring plan.
The company said it earned a net profit of $1.9 billion for 2016 (1.8 billion euro) compared with just $100 million (93 million euro) during the prior year, when restructuring and recall costs dragged its earnings down.
The automaker also exceeded its own guidance to shareholders as it improved its profit margin in North America and increased sales in Europe.
"This has been a record year for FCA, but more importantly ... we are now 60 percent done with the 2014 to the 2018 plan," CEO Sergio Marchionne said. "I think it is fair to say there was a fair amount of incredulity about the plan (when it was unveiled in 2014). Those '18 numbers don't look as un-doable now as they did then."
For 2017, the automaker said it expects its net profits will top 3 billion euro, a goal that Merrill Lynch analyst John Murphy called "admirable" as he questioned the forecast.
Fiat Chrysler's stock increased 9 cents, or 0.8 percent, by mid-afternoon to $11.07 per share. The company's stock has, however, increased more than 70 percent over the past three months.
In 2016, Fiat Chrysler said it earned an adjusted net profit of $2.8 billion (2.5 billion euro). Last fall, the company told investors it expected to earn more than $2.5 billion (2.3 billion euro).
The company's performance improved even though it sold fewer vehicles worldwide. The automaker was able to improve its performance because it boosted its profit margins in North America by selling more pickups and SUVs and fewer cars. Meanwhile, sales increased in Europe and cost-cutting actions put an end to losses in South America, where Brazil's sputtering economy and political turmoil has hurt industry sales.
Globally, Fiat Chrysler sold 4.7 million cars and trucks in 2016, a 3 percent decline from the prior year.
The company's global revenue increased slightly to $118 billion (111 billion euro) compared with $123 billion (110.6 billion) the prior year.
Despite improvements in profit margins and much lower debt, the company still has a long way to go before it hits its original global sales target of selling more than 7 million vehicles by 2018.
Marchionne adjusted the automaker's strategic plan last year when he decided to end production of the Dodge Dart and Chrysler 200 cars and stopped providing an annual sales volume goal.
Instead, Marchionne has set his sights on boosting production of Jeep SUVs and Ram pickups in North America as he works to expand the global reach of both of those brands, which have higher profit margins than the company's car brands.
Fiat Chrysler also had to delay its plans to relaunch the Alfa Romeo brand in the U.S. The Alfa Romeo Giulia sedan and Alfa Romeo Stelvio SUV are both being introduced in the U.S. this year. Originally, the company hoped to launch eight new Alfa Romeo models in a quest to reach annual sales of 400,000 by 2018.
"We have made all of the industrial decisions we can make to achieve the 2018 numbers," Marchionne said.
In North America, Fiat Chrysler's pre-tax profit increased to 5.47 billion (5.1 billion euro) compared with $4.7 billion (4.4 billion euro) in 2015 even though sales dropped to 2.6 million vehicles, down from 2.7 million last year.
That boosted the company's North American profit margin to 7.4 percent for the year compared with 6.4 percent for 2015.
In Europe, Fiat Chrysler's pre-tax profit increased to $580 (540 million euro) compared with $228 million (213 million euro) during the prior year. The automaker's total European sales increased to 1.3 million new cars and trucks compared with 1.1 million in 2015.
In South America, where the Fiat brand has the most market share of any brand, the automaker's pre-tax income increased to $5.3 million (5 million euro) compared with a loss of $92 million (87 million euro) the prior year.
Richard Palmer, Fiat Chrysler's chief financial officer, said he is hopeful that the Brazilian economy will not get any worse and will begin to improve this year.
In Asia, the automaker's pre-tax income more than doubled to $105 million (105 million euro) compared with $55 million (52 million euro) the prior year.
