MILAN (AP) — Fiat Industrial, the Italian maker of heavy vehicles, on Tuesday reduced its full-year forecasts after reporting a 22 percent drop in first-quarter profits due to weak sales of trucks and construction vehicles.
Fiat Industrial SpA reported net profit in the quarter ending March 31 was 138 million euros ($181 million), down from a restated 177 million euros in 2012. Revenue was flat at 5.8 billion euros thanks to higher sales of farm equipment which helped offset declines in truck sales and construction vehicle revenues, which were down 27 percent.
Fiat Industrial shares closed down 5.3 percent at 8.57 euros.
Fiat Industrial Chairman Sergio Marchionne said the lower 2013 forecasts were driven by "renewed pessimism on the construction side," which is expected to continue throughout the year, and uncertainty over truck sales in Europe, where the market contracted 15 percent in the quarter.
Revenues at the Iveco truck division dropped 4 percent to 1.8 billion euros, with deliveries in Europe down 7.7 percent. Iveco's strongest markets in southern Europe are suffering the strongest declines, with Italy down by 25 percent and Spain by 20 percent.
The company, which is in the process of fully merging with its U.S.-based CNH agricultural and construction subsidiary, lowered its forecast of achieving 5 percent revenue growth to a range of between 3 percent and 4 percent. The company raised its debt forecast for the end of the year to 1.4 billion euros to 1.6 billion euros.
Marchionne said he expects to complete the CNH merger and list the new company on Wall Street by the end of the third quarter.
Fiat Industrial, which already controls 88 percent of CNH, is seeking a full merger with the U.S. subsidiary to boost its scale and improve efficiency.