Fiat Chrysler Automobiles (NYSE:FCAU) has a new CEO: In an emergency meeting on Saturday, FCA's board of directors elected longtime Jeep brand chief Mike Manley to the company's top job.
Manley replaces Sergio Marchionne, who is reportedly gravely ill from complications that set in following shoulder surgery.
It's a seismic change. Marchionne is an industry giant who worked something close to magic in knitting together Fiat and Chrysler to create a viable, profitable global automaker. His ill health and departure is sad news, not just for FCA and its shareholders, but for auto-industry watchers worldwide.
To be blunt, Manley has huge shoes to fill. But he'll have very little time to ramp up before his first appearance in his new role: FCA will report its second-quarter earnings before the U.S. market opens on Wednesday, July 25. I expect Manley to join CFO Richard Palmer on the company's earnings call.
Here's a quick look at where things stand and at what to expect when FCA reports.
Who is Mike Manley?
Manley is a longtime FCA executive who has led Jeep since 2009 and the Ram truck brand since 2015. British by birth, he began his career working for auto dealership groups in the U.K., joining the company then known as DaimlerChrysler when it acquired the dealership group that employed him in 2000.
Manley came to the U.S. in 2003, rising quickly through Chrysler's ranks until taking over as Jeep's CEO, a position he held until this past weekend. He oversaw a period of explosive growth: Under his leadership, Jeep's global sales roughly quadrupled.
What will Manley do differently?
For the moment, not much. Marchionne, who had expected to retire next April, left a comprehensive business plan for the next few years (a plan that Manley had a substantial hand in crafting). I expect that at least for the near term, Manley will execute on that plan, which calls for FCA to more than double its profits over the next four years while investing heavily in electric cars and other advanced technologies.
FCA's business plan was presented to investors by the management team on June 1. Marchionne closed his comments that day by answering an investor concerned about his potential successor:
Can Marchionne leave a script or instruction? The answer is that there is no script or instruction. FCA is a culture of leaders and employees that were born out of adversity and who operate without sheet music. That is the only way we know.
On Wednesday, Manley will step to the head of the bandstand for the first time, as FCA reports earnings.
FCA earnings: what Wall Street expects
Wall Street expects a good quarter. Analysts polled by Thomson Reuters expect FCA to report earnings of 0.85 euros per share, up from 0.74 euros per share in the second quarter of 2017. They expect revenue to grow about 3.8% to 28.99 billion euros from 27.93 billion euros a year ago.
How FCA's sales fared
FCA's U.S. sales rose 7.9% in the second quarter, paced by a gain of almost 23% for the Jeep brand. Manley's other brand, Ram, saw sales slip slightly (down 0.2%) in the quarter. Demand for pickups has remained strong in the U.S., but FCA had some supply issues due to early production snags that slowed the launch of its all-new 2019 Ram 1500 pickup.
The upshot: Manley will have good news to report
As I'm sure he'll note on this week's earnings call, Manley's abrupt promotion was the result of sad circumstances. But it's likely that FCA's second-quarter result will be a good one, giving Manley some positive news to report in his debut.