Fiat Industrial profit rises on farm machinery growth
MILAN (Reuters) - Italian truck and tractor maker Fiat Industrial FI.MI reported a rise in second quarter net profit on Wednesday on the back of higher margins at its farm machinery business and a slight improvement in trucks.
Heavy truck markets are slowly picking up due to a need to replace ageing fleets bought during the boom years before the 2008 financial crisis.
The Fiat-controlled company (FIA.MI), which competes with Caterpillar Inc (CAT.N) and Deere & Co (DE.N), said revenues were 6.8 billion euros ($9.01 billion) in the second quarter, up 3.1 percent. Net profit rose to 328 million euros, from 251 million euros previously.
Revenue at truck unit Iveco, which accounts for about one third of group sales, fell 5.6 percent to 2.14 billion euros.
Iveco returned to a trading profit in the second quarter, earning 1 million euros compared with a trading loss of 9 million euros in the first quarter. But compared with the second quarter of last year, trading profit was down.
Fiat Industrial's farm machinery business in the United States CNH CNH.N had high-margin sales which helped trading profits rise to 604 million from 478 million euros. Its trading margin rose to 13.7 percent from 11.5 percent last year.
CNH's results were well above consensus.
Fiat Industrial and CNH's planned merger should be complete in early September, executives have said. Fiat Industrial Chairman Sergio Marchionne will speak to investors at a conference call at 1400 GMT on Wednesday.
Net debt for the group fell 263 million euros to 2.27 billion euros.
The debt and revenue figures beat analysts' forecasts and sent shares up about 4 percent.
(Reporting by Jennifer Clark. Editing by Jane Merriman)
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