Stellantis absorbs 3 billion euro strike hit with higher revenue
STELLANTIS said the prolonged strikes that curbed output at its North American facilities cost the Jeep maker around 3 billion euros (S$4.36 billion) in revenue.
Pre-tax operating profit during the walkout period was negatively impacted by under 750 million euros, Stellantis said on Tuesday (Oct 31). It still reported better-than-expected third-quarter revenue, bolstered by stable pricing, improving logistics and robust demand for models such as the electric Jeep Avenger.
The “solid” earnings beat was aided by healthy volumes in North America, where pricing is stronger than in Europe, Bernstein analyst Daniel Roeska said in a note. Stellantis also confirmed its full-year guidance.
In the past few days, the carmaker reached tentative labour agreements with unions in Canada and in the US, the group’s biggest profit pool. The latter deal with the United Auto Workers will bring the top wage to over US$42 an hour by April 2028.
Stellantis already cancelled plans for US events including the CES show in January and will continue to cut costs to make up for the strike impact, said chief financial officer Natalie Knight.
“One of our trademarks is cost discipline,” she said on a call with reporters. “We’re looking at everything – you will continue to hear more about that mitigation as we go forward.”
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The manufacturer has been expanding its lineup of electric vehicles as the industry battles to retain mass-market buyers, who have seen their spending power diminished by inflation. Its Citroën brand started taking reservations this month for the new electric ë-C3 starting at 23,300 euros, making it the least-expensive EV produced in Europe. EV sales climbed 37 per cent in the third quarter.
Third-quarter revenue rose to 45.1 billion euros, surpassing analyst predictions. The company raised its industry growth outlooks for markets including North America and Europe. It lowered the outlook in South America.
Stellantis this month struck a 1.5 billion euro deal to snap up a stake in Chinese EV manufacturer Zhejiang Leapmotor Technologies to help it address declining sales in the world’s biggest auto market and further lower EV costs. The manufacturer will also have a controlling stake in a joint venture to build and sell Leapmotor cars outside of China.
Stellantis said it bought back 500 million euros in shares during the third quarter and expects to complete its 1.5 billion euro share buyback programme in the current quarter. BLOOMBERG
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