Fiat-Chrysler's profit slump hits shares

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Fiat-Chrysler's profit slump hits shares

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Fiat’s shares slumped on Wednesday as it revealed lower profit for last year. It made 943 million euros, down from 1.14 billion in 2012, with sales in South America a weak spot.

Fiat cut its profit guidance for 2014 and will not pay a dividend to shareholders for 2013.

Without the profits from Chrysler – which Fiat just took full control of – the company would have lost 441 million euros in 2013.

In South America, profit fell by more than half to 492 million euros last year.

At the same time the new name for the combined companies was announced. It is Fiat Chrysler Automobile.

The shares will trade in New York and Milan. Its fiscal headquarters will move to Britain, to take advantage of the low business tax rate there. The legal headquarters will be in the Netherlands.

Registering the group in the Netherlands with a UK tax domicile could ultimately deprive the United States and Italy of tax revenue on some overseas earnings, experts say.

Fiat is taking full control of Chrysler after striking a $4.35 billion (3.2 billion euro) deal to buy the 41.5 percent it didn’t already own from a union retiree healthcare fund.

The deal, which closed on Jan. 21, creates the world’s seventh-largest automaker with operations in 40 countries and brands including Alfa Romeo, Dodge, Ferrari, Jeep and Maserati.