By Eric Sylvers 

MILAN-- Fiat Chrysler Automobiles NV, the smallest of Detroit's Big Three, on Wednesday indicated it is ahead of its rivals in at least one area: returning to black ink in Europe.

Stronger sales of small trucks and vans and the Fiat 500 and Jeep pushed Fiat Chrysler to a small operating profit on the Continent in the last three months of 2014 after 30 quarters of losses. Fiat Chrysler Sergio Marchionne said he expects the company to post a full-year operating profit in Europe, the Middle East and Africa while General Motors Co. and Ford Motor Co. have said they would lose money again this year in the region.

Europe in 2014 posted its first year of growth in new-car sales after six years of decline, though production remains well below the levels before the financial crisis. Some car makers, including Fiat Chrysler, Ford and Volkswagen AG, have begun to boost production in Europe after years of reducing output. Fiat Chrysler earlier this month said it is hiring 1,000 workers at a factory in southern Italy that makes a small Fiat and Jeep SUV. Cheap financing, dealership discounts, a nascent European economic recovery and government subsidies in some countries have helped fuel a rise in sales in the region.

"Strangely enough, for a guy who has been as negative on EMEA as I have been now for the last four or five years, I'm actually turning positive, " Mr. Marchionne told analysts on a conference call. "I think there is upside from where we are. Just bear with us, I think 2015 will be all right."

Fiat Chrysler forecast a 12% increase in global sales for this year to EUR108 billion ($122.5 billion) and a jump of as much as 41% in operating profit, indicating the company is on track with its EUR48 billion five-year plan presented last May, which at the time drew criticism for being overly optimistic and unrealistic. Global vehicle shipments are seen increasing to between 4.8 million and 5 million from 4.6 million in 2014.

Following a transformational 2014, which kicked off with Fiat buying the 41% of Chrysler it didn't already own, Mr. Marchionne must now show investors he can deliver on his plan. Other steps taken last year by Mr. Marchionne include a reorganization that created the Dutch-incorporated and London-based Fiat Chrysler, the new company's debut on the New York Stock Exchange, and the raising of $4 billion in fresh capital through the sale of shares and a convertible bond.

The results and forecasts Wednesday failed to excite investors, as shares dropped before regaining some ground to close down 0.2% at EUR11.56 in Milan trading. The stock surged 61% last year and has added another 20% so far in 2015.

"With operations continuing to fall in-line with/behind expectations and cash generation still seemingly several years out and by no means guaranteed, we continue to question why investors should pay more for FCA than for other names in the sector," George Galliers, of equities researcher Evercore ISI, wrote in a note.

To meet his targets this year, Mr. Marchionne will have to reverse a skid in results in North America, which accounts for more than half of revenue and profit, while building on the nascent European turnaround. He will also have to reignite slowing growth in Latin America, something Mr. Marchionne says will begin when a new Brazilian plant comes online by the end of the year.

With the EUR32 million in operating profit in Europe in the fourth quarter, Fiat Chrysler turned a profit in all four of the macro-regions for which it breaks out results.

"For those of you that have been in this business long enough to remember our travels from 2007 until today, and the level of skepticism that was associated with our strategic redirection of our assets and the redeployment of our manufacturing activities in a particular direction, this is the first indication, the first tangible proof of the fact, that this thing can be turned," Mr. Marchionne said.

In the fourth quarter, net profit plunged 68% to EUR420 million as a tax gain from 2013 wasn't repeated. Operating profit rose 14% while revenue climbed 13% to EUR27.08 billion. Fiat Chrysler said it wouldn't pay a dividend on 2014 profit to preserve funds for the five-year plan. Net industrial debt at the end of last year was EUR7.7 billion.

Fiat Chrysler has yet to get a strong tailwind from the strengthening dollar though that is expected to change as production increases in Italy, Chief Financial Officer Richard Palmer said on the conference call.

Though the financial results of FCA US, the former Chrysler Group LLC, are included in Fiat Chrysler's numbers reported on Wednesday, the Auburn Hills-based corporate unit will report its results separately on Feb. 3.

Write to Eric Sylvers at eric.sylvers@wsj.com

Access Investor Kit for Volkswagen AG

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=DE0007664005

Access Investor Kit for Volkswagen AG

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=DE0007664039

Access Investor Kit for Ford Motor Co.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US3453708600

Access Investor Kit for General Motors Co.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US37045V1008

Access Investor Kit for Volkswagen AG

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US9286623031

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

General Motors (NYSE:GM)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more General Motors Charts.
General Motors (NYSE:GM)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more General Motors Charts.