The European car industry received a confidence boost Wednesday as the Continent's manufacturers continued to post a raft of positive first-quarter results, raising expectations that the region will soon join the U.S. in returning to its precrisis record for new vehicle sales.
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Fiat Chrysler Automobiles NV reported results that beat expectations, leading to a jump of almost 10% in the company's stock.
Daimler AG, the maker of Mercedes-Benz cars, said quarterly net profit had doubled as sport-utility vehicle sales surged and raised its forecasts for the year. Peugeot, which during the first quarter reached an agreement to buy General Motors Co.'s European business, reported a 4.9% rise in revenue that beat expectations.
Wednesday's results come after strong showings last week from Volkswagen AG and BMW AG.
Car makers sold 14.6 million new vehicles in the EU in 2016, the highest number in almost a decade, yet the region has had a long journey back from the financial crisis and volume is still about 6% below the precrisis high set in 2007. That compares with the U.S. where auto makers sold 17.6 million vehicles in 2016, a second straight yearly record.
The European recovery has been uneven with some countries, including Germany and the U.K., passing their prerecession highs for car sales. Those on the southern edge of the Continent, in particular Italy, haven't made it yet.
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The first-quarter results and upbeat forecasts will help to appease an industry that has been on edge despite recent signs of improvement. Enthusiasm for incremental advances in car sales seen since early 2016 were tempered by political upheaval such as the U.K's vote to leave the EU and terror attacks across the region.
So far, car sales in the U. K. -- the region's second-biggest market after Germany -- have remained buoyant despite the Brexit vote and the small price rises that several companies introduced to help offset the fall in the value of the pound. The terrorist attacks didn't significantly hurt consumer confidence on the Continent, while in the Netherlands the far-right populist party failed to make inroads and in France, a runoff in early May is expected to elect a centrist, pro-European president.
Fiat Chrysler reported an 11% increase in first-quarter profit as revenue advanced and the Italian-American car maker improved results in its two main markets. In the U.S., profit inched up 1% even as the company sold 6% fewer vehicles. The results cheered investors who had been expecting worse after Chief Executive Sergio Marchionne said earlier this month that the first quarter was "difficult." The car maker also confirmed its ambitious full-year targets.
The company's shares closed 9.3% higher in Milan at EUR10.60, the best-performing auto stock in Europe.
Daimler's net profit in the three months to the end of March doubled to EUR2.7 billion ($2.94 billion). The company said revenue and operating profit would "increase significantly" this year.
Peugeot, official known as Group PSA, said revenue in the first quarter rose to EUR13.6 billion as sales of higher-margin new cars helped offset currency pressure. The company said it expects the automotive market to grow by about 1% in Europe this year.
Paris-based Peugeot is focusing on Europe with its acquisition of GM unit Opel, which will boost auto sales there by 50%, making it the region's second-largest car maker after Volkswagen.
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(END) Dow Jones Newswires
April 26, 2017 13:14 ET (17:14 GMT)