MILAN Fiat FIA.MI shares rose on Tuesday after its U.S. unit Chrysler's third-quarter profits were better than expected, indicating Fiat will meet earnings forecasts and confirm full-year targets.
Chrysler reported an 80 percent increase in quarterly net profit on Monday and confirmed 2012 full-year targets.
"Chrysler's results were better than expected, which means it will make a stronger contribution to Fiat's bottom line than I thought," said a Milan-based analyst.
Fiat will report its results later on Tuesday. It is unlikely to present a full-blown new business plan to 2014, as it had indicated in July, because of the dire state of Europe's car market.
Investors are keen to hear more details on Fiat's investment plan for new models, which has been put on hold pending a recovery in European markets, where Fiat does about a quarter of its sales by volume.
Fiat's European operations are expected to post a loss this year as its volume brands slump, chief executive Sergio Marchionne has said. The loss in Europe has been offset by strong growth in the U.S. and in Brazil.
A median forecast of 20 analysts sees Fiat and Chrysler's third-quarter combined net profit at 250 million euros, up from 112 million euros for the third quarter of last year.
At 0937 GMT, Fiat shares were trading up 1.6 percent at 4.19 euros.
(Reporting by Jennifer Clark; Editing by Erica Billingham)