MILAN (Reuters) -- MILAN (Reuters) -- Fiat today reported a fall in second-quarter operating profit as a better performance from its luxury brands and its Asia and European operations failed to offset weak Latin American and disappointing North American results.
Fiat said earnings before interest and taxes (EBIT), including special items, stood at 961 million euros ($1.29 billion) in the April-June period, down from 1.07 billion euros the previous year.
Its net profit more than halved to 197 million euros from 435 million euros, hit by an increase in tax charges with U.S. earnings now subject to deferred taxation.
Chrysler Group's second-quarter results are due to be reported Aug. 11. Fiat is preparing for shareholders to vote on its merger with Chrysler in two days.
Results from Fiat's North American operations disappointed, with operating profit down 18 percent despite a 7 percent rise in revenues. Lower profit in the NAFTA region "undermines the whole bull story about margins catching up with" profitability at Ford Motor and General Motors, Rabih Freiha, an analyst at Exane BNP Paribas in London, said in an e-mailed report. "If it's pricing, as in the first quarter, then this would be a very negative signal."
However, the group almost broke even in Europe, with the second-quarter loss reduced to 6 million euros from a loss of 69 million euros the year before, helped by sales of the Fiat 500 family, the new Fiat Ducato and Jeeps.
Fiat CEO Sergio Marchionne said he was encouraged by the progress in Europe. "EMEA (Europe, Middle East and Africa) is stabilizing," he told analysts on a conference call.
In Latin America analysts were expecting a poor performance because of the impact of the strong euro against its currencies and the end of car sales incentives in Brazil, but the 23 percent drop in sales was bigger than some had expected. Brazil is the company's second-biggest market and Latin America which used to account for about a quarter of Fiat's profits.