ROSY RESULTS

Profit announcement comes as automaker is told to pay for mishandling of recalls

Fiat Chrysler raises its revenue forecast, despite facing fines for mishandling recalls,

MILAN— Fiat Chrysler Automobiles on Thursday raised its revenue forecast after strong sales in North America and a recovery in the European market boosted second-quarter profits by 70 per cent.

The rosy results come as the carmaker will be required to pay millions of dollars to get potentially defective Ram pickups and older Jeeps off the road under a deal with safety regulators to settle allegations of mishandling nearly two dozen recalls. The company said in a presentation to analysts Thursday that it didn’t expect the Ram buyback offer to cost more than $20 million (U.S.).

Fiat Chrysler reported its net profit in the three months ending June 30 was € 333 million ($473 million Canadian), compared with € 197 million in the corresponding period last year.

It said it was raising its revenue forecast to € 110 billion from € 108 billion, on worldwide shipments of 4.8 million units, at the low end of the previous range. It maintained its net profit forecast of between € 1 billion and € 1.2 billion.

Although the Ram buyback offer potentially covered 585,000 trucks with faulty steering components, Fiat Chrysler said it already has repaired 410,000, and those customers aren’t eligible for the buybacks. That leaves about 175,000 trucks eligible for repurchase at the original sales price minus depreciation, plus a 10 per cent premium.

In an consent agreement with the National Highway Traffic Safety Administration announced last weekend, FCA was assessed a record $105 million (U.S.) penalty for recall problems.