Shares in Jeep-maker Stellantis slump despite rising sales / Photo: MARCO BERTORELLO - AFP/File
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Shares in Jeep-maker Stellantis slump despite rising sales
Shares in Stellantis suffered a double-digit fall on Thursday as the US-European auto giant whose brands include Jeep, Fiat and Peugeot warned of financial bumps ahead.
The group -- whose 14 brands also include Alfa Romeo, Maserati and Chrysler -- reported a 13-percent rise in third-quarter sales as business improved in the United States, where it once struggled.
Sales reached 37.2 billion euros ($43.2 billion) in the three-month period as it reported growth in nearly every region except South America.
"As we continue to implement important strategic changes in order to provide our customers with greater freedom of choice, we have seen positive sequential progress and solid year-over-year performance in Q3, marked by the return of top-line growth," said chief executive Antonio Filosa.
"This is encouraging and we are continuing to build on these gains," Filosa said.
But Stellantis also warned it expects to incur charges in the second half of the year.
The company said the additional costs were due to the "important and necessary changes to our strategic and product plans" as well as "regulatory, geopolitical, macro-economic and other external and internal developments".
It also said it had begun a review of how it estimates warranty costs, which it expects will lead to changes that result in one-off charges in the second half of the year.
- Turned the corner? -
Shares in Stellantis fell following the announcement, and briefly exceeded 10 percent as trading opened on Wall Street.
Since the start of the year Stellantis shares have lost more than 30 percent of their value.
"Given these uncertainties, we believe that it is too early to declare that the automaker is on a real path of recovery," said analysts at Oddo BHF bank.
The automaker took the highly unusual step of releasing a second statement.
"You can see that in Q3 we continued and accelerated the actions we started in January to correct past strategic and operational decisions," Filosa said in the statement.
Filosa took over Stellantis in June, six months after his predecessor, Carlos Tavares, was forced out following the company's woes in the United States.
"We quickly changed our organizational structure to restore proximity to our customers, dealers and suppliers," he added.
Shipments also improved in the third quarter, rising 13 percent to 1.3 million units, mostly thanks to 35-percent growth in North America.
The group said inventories have normalised in the United States after an effort last year to cut stocks at US dealerships temporarily curbed production.
Filosa said Stellanis's recent product actions and investments "have restored the freedom to choose to the very heart of our strategy."
Stellantis announced in October plans to invest $13 billion in US plants over the next four years, which will see the group offer more internal combustion engine vehicles as the Trump administration has relaxed vehicle emission rules.
It will expand production of the Jeep Cherokee and Jeep Compass, and reintroduce an entry-level version of its Ram 1500 pickup.
Large pickups generate half of Stellantis's profits in the United States.
A.Mendoza--GBA
