UPDATE 1-Fiat Chrysler boosts margins in North America, debt down

(Adds details, updates shares)

MILAN, Jan 25 (Reuters) - Fiat Chrysler (FCA) boosted margins in its main profit centre of North America in the last quarter of 2017 and cut more debt than expected, pushing shares in the Italian-American carmaker up 3 percent on Thursday.

The company's Milan-listed shares initially fell after the earnings release, with traders citing slightly lower financial guidance for 2018.

But they quickly recovered as analysts welcomed FCA's efforts to erase debt and its improving performance across all regions.

North America accounted for 71 percent of earnings last quarter and the group increased profit margins in the region to 8 percent from 7.1 percent a year earlier, even as shipments fell 3 percent.

FCA has been retooling some U.S. factories to boost output of lucrative sport-utility vehicles (SUVs) and trucks while ending production of some unprofitable sedans to boost margins in North America and close the gap on larger U.S. rivals General Motors (GM) and Ford.

Ford reported a fourth quarter automotive margin for North America of 6.8 percent, down from 8.5 percent a year earlier.

FCA's performance also improved in the other regions where it operates, including Europe, Latin America and Asia.

It cut net industrial debt to 2.4 billion euros ($3 billion), down from 4.6 billion at the end of 2016. Analysts had expected debt of around 2.54 billion, according to a Thomson Reuters poll.

"The results are not bad: the debt, even though only lightly better than expected, surprised to the positive," a Milan-based analyst said.

FCA trimmed its expectations for 2018 revenues and forecast adjusted operating profit and its cash position at the lower end of previous guidance.

The world's seventh-largest carmaker said it expected full-year revenues of around 125 billion euros, down from a previous forecast of around 136 billion.

It sees adjusted earnings before interest and tax (EBIT) of at least 8.7 billion euros compared with a range of between 8.7-9.8 billion euros before.

FCA expects to cancel all debt during 2018 and generate around 4 billion euros in net cash this year. It previously guided for net cash of 4-5 billion euros.

For the fourth quarter, FCA reported a 22 percent rise in adjusted EBIT, in line with a Thomson Reuters poll of analysts, while revenues fell 3 percent.

($1 = 0.8063 euros) (Additional reporting by Nick Carey in Detroit; Reporting by Agnieszka Flak and Stefano Rebaudo; Editing by Mark Potter)