Stellantis Plans Output, Price Cuts After Weak H1 Results

Stellantis has pledged to address problems in North America and elsewhere, including cutting output and prices, after the world's No. 4 carmaker delivered worse-than-expected first-half results, sending its shares down 10%, Giulio Piovaccari and Gilles Guillaume reported for Reuters.

Stellantis' Milan-listed shares were down about 8% after earlier hitting their lowest since August 2023. I Photo: Stellantis Facebook

"The company's performance in the first half of 2024 fell short of our expectations," CEO Carlos Tavares said in a statement.

Adjusted operating income (EBIT) fell 40% to 8.463 billion euros ($9.17 billion) in the half-year to June 30, below the 8.85 billion euros expected by analysts in a Reuters poll. The results pile more pressure on Tavares to revive flagging margins and sales and cut inventory in the US.

The carmaker is betting on the launch of 20 new models this year, which it hopes will boost profitability. Meanwhile, its Milan-listed shares were down about 8% after earlier hitting their lowest since August 2023.

They have lost 20% of their value this year, making them the worst performer among the major European carmakers. Its margin on adjusted EBIT shrunk to just below 10%, slipping below the double-digit margin it aims to achieve for the full year.

Stellantis' free cash flow was negative at almost 400 million euros in the first half.

"We are working hard to meet our full-year (adjusted operating income) margin forecast and to deliver positive cash flows in the second half," CFO Natalie Knight told a media roundtable.