Stellantis earnings fall as automaker trims bloated inventories

MILAN (Reuters) – Stellantis reported a 27% fall in third-quarter revenue on Thursday, slightly better than expected, as the automaker continued to work to correct bloated inventories and poor business performance that led to a major profit warning last month .

“Inventory declines in the United States are occurring at a faster pace than expected,” new Chief Financial Officer Doug Ostermann said on the call, adding that he expects U.S. dealer inventories to decline by 100,000 vehicles ahead of the end-November target.

Stellantis shares were up 0.7% at 0819 GMT. This year they have lost about 40% of their value.

Ostermann, who previously headed Stellantis’ China operations, replaced Natalie Knight this month as part of a senior management shakeup aimed at correcting strategic missteps, particularly in North America.

Stellantis’ specific challenges combine with broader struggles for Western automakers, including weak global demand, particularly for electric vehicles (EVs), technology transition challenges and increased competition from Chinese peers.

Europe’s biggest automaker Volkswagen is considering plans to close at least three factories in Germany and lay off tens of thousands of employees in a more radical overhaul than expected, the head of its works council said this week.

Stellantis on Thursday confirmed its recently cut full-year guidance.

After reporting a 40% decline in adjusted operating profit (EBIT) in the first half, Stellantis last month forecast full-year adjusted operating profit of 5.5% to 7%, below its previous double-digit estimate and also an increase funds. up to 10 billion euros. It also signaled a possible dividend cut and share buybacks in 2025.

The group reported third-quarter revenue of 33 billion euros ($35.8 billion), beating analysts’ expectations of 31.1 billion euros, according to a Reuters poll taken after Oct. 16, when Stellantis first provided preliminary guidance for the quarterly unit. sales and shipments.

Deliveries fell 21% to 1.17 million vehicles. The main reason for the decline was gaps in the product line, Ostermann said, although he added that those gaps should start to close.

The company said it plans to release about 20 new models in 2024.

Stellantis said the total vehicle fleet stood at 1.33 million vehicles as of Sept. 30, down 129,000 from last year. In the US, total dealer inventories fell by more than 80,000 between June 30 and October 30.

($1 = 0.9215 euros)

(Reporting by Giulio Piovaccari and Gilles Guillaume; Writing by Alvise Armellini and Giulio Piovaccari; Editing by Gavin Jones and Mark Potter)