Fiat Chrysler shares plummet 12 percent on weak outlook

Rebecca Cook | Reuters

Fiat Chrysler Automobiles assembly workers build 2019 Ram pickup trucks at the FCA Sterling Heights Assembly Plant in Sterling Heights, Michigan, October 22, 2018.

Fiat Chrysler shares crashed by more than 12 percent Thursday morning after the Italian-American automaker forecast a weak outlook for 2019.

The automaker said it expects results in the first half of the year to be down over last year, in part, because the company will not be selling two generations of the Jeep Wrangler side-by-side, as it did in 2018. It is also planning some Wrangler production downtime to retool factories for launch of the plug-in hybrid version of the iconic off-road machine in early 2020.

The company also said continued actions to manage dealer inventories will also hit its finances in the first half of the year. It is also facing higher-than-expected capital expenditures, shelling out roughly 500 million euros in connection with U.S. diesel emissions cases. It’s also paying an effective tax rate that’s about 25 percent higher than it was in 2018, mostly due to changes in the U.S.

Fiat Chrysler said expects the second half of the year to pick up from sales of its recently released Jeep Gladiator mid-size pickup truck and its heavy duty Ram pickup trucks, introduced at the Detroit auto show.

The automaker said it expects total industry sales for North America to decline in 2019 to 17.2 million, down from 17.7 million in 2018, the automaker said in a presentation to investors.