Net profit in the first three months of 2014 was €197 million, down 54.7 percent from the equivalent figure last year. Operating profit fell by 10.4 percent to €961 million, even though sales rose by 5.0 percent to €23.3 billion.
The news sents Fiat shares down 1.51 percent in Milan, while the broader index was largely flat. The group said it had reduced net debt by €300 million in the quarter to €9.7 billion.
But despite the profits plunge, Fiat held to its forecasts for the year. It is targeting net profit of €600-800 million and sales of €93 billion.
It expects operating profit to turn out at €3.6-4.0 billion, and debt to be €9.8-10.3 billion.
Fiat, which took full control of Chrysler in January, has called a shareholders' meeting for Friday to approve a full merger of the two groups. The new entity would be called Fiat Chrysler Automobiles (FCA).