UPDATE: Fiat Profit Plummets 88%

Fiat SpA reported net earnings of €31 million in the January-March period of 2013 compared with €262 million a year earlier.

Revenue and vehicle sales both dipped 2% to €19.8 billion and 510,000 units, respectively.

Fiat attributes the declines to sharply lower demand in Europe and a smaller profit contribution from its Chrysler unit, where the cost of new-model launches dragged down income.

But without Chrysler, the company would have posted a €235 million net loss in the first quarter compared with a €276 million loss in the same period of 2012.

Fiat's trading income fell 23% to €618 million in the latest quarter. Without Chrysler, the company swung to a €25 million trading profit from a €10 million loss a year earlier.

Fiat boosted revenue 35% to €1 billion in Asia Pacific in the three-month period. That regional gain was more than offset declines of 5% to €2.5 billion in Latin America, 4% to €4.4 billion in Europe and 3% to €10 billion in North America. Global sales of the company's premium and luxury brands rose 4% to €700 million, thanks largely to an 8% jump to €551 million at Ferrari.

Fiat held €9.1 billion in cash on March 31, virtually unchanged from three months earlier. Net automotive debt grew to €7.1 billion from €6.5 billion on Dec. 31.

The company says pricing pressure and weak demand are likely to depress its European profits for some time. But Fiat affirms its previous full-year outlook for group net earnings of €1.2 billion-€1.5 billion and a trading profit of €4 billion-€4.5 billion. The company expects revenue of as much as €92 billion.