Fiat Chrysler US, the automaker previously known as Chrysler, said Thursday its profit fell 88.5 percent after the company booked one-time charges of more than $1 billion to cover higher-than-previously-estimated recall costs and covered the cost of damaged inventory in the August port explosions in Tianjin, China.
The Detroit-area automaker said it earned a profit of $70 million for the three months ending Sept. 30 compared with a profit of $611 million for the same period last year.
FCA US said it took a one-time charge of $848 million to cover an expected increase in future recall costs and $159 million to cover the cost of inventory lost after the Tianjin warehouses exploded.
The sharp earnings decline is in line with the losses that FCA US’s parent company, Fiat Chrysler Automobiles, reported a week ago.
Last week, Fiat Chrysler Automobiles reported a loss of $330 million (299 million euros) during the third quarter compared with a profit of $208 million (188 million euros) during the same period a year ago. That loss also was attributed to the one-time charges for recall costs and the Tianjin warehouse explosions.
FCA US continues to report earnings separately because it has publicly traded debt connected to Chrysler’s emergence from bankruptcy in 2009.