By Giulio Piovaccari and Gilles Guillaume
MILAN (Reuters) -Automaker Stellantis warned about upcoming charges on Thursday related to changes in regulation, its strategy and product plans, stirring investor concerns about its outlook and knocking the Jeep maker’s shares down by as much as 6.5%.
The Franco-Italian company reported a 13% rise in third-quarter revenue, its first top-line growth after seven quarters, and reiterated its forecasts for higher revenue, improving cash flow and low-single digit margins in the second half.
But it said it expected to book one-off charges in the second half from changes to its strategic and product plans, including a pivot back to hybrids after an earlier push into electrification, and warranty extensions for flawed products including some engines.
VAGUE GUIDANCE KNOCKS SHARES
“We are also taking decisive actions to align Stellantis’ resources, programs and plans to support long-term, profitable growth, including our recently announced $13 billion investment in the U.S.,” new CEO Antonio Filosa said in a statement.
Jefferies analysts flagged the upcoming charges as a concern, calling the guidance “vague”. Citi analysts cautioned in a note that the size and impact on free cash flows remains unclear.
Milan-listed shares in the company were down 5% by 1010 GMT, among the biggest fallers on the pan-European STOXX 600.
A spokesperson for the company told Reuters such extra charges were already factored into its second-half guidance, which the statement said also assumes no disruptions or shortages in current supply chains.
The global industry is grappling with a deepening semiconductor supply crunch stemming from U.S.-China trade war-related issues at Dutch firm Nexperia.
Trump said on Thursday he had agreed with President Xi Jinping to trim tariffs on China in exchange for Beijing cracking down on the illicit fentanyl trade, resuming U.S. soybean purchases and keeping rare earths exports flowing.
SALES BACK ON THE RISE
Filosa, appointed CEO in June, is steering a turnaround in the U.S., where the world’s fourth-largest automaker has faced declining sales and bloated inventories — issues that contributed to the departure of former chief Carlos Tavares.
Earlier this month, the company pledged $13 billion to ramp up U.S. production and offset tariffs imposed by Trump.
Stellantis on Thursday also estimated a 1 billion euro ($1.2 billion) impact from current U.S. trade policies in 2025, at the lower end of its previous forecast.
He has also announced other bold moves, including booking billions of euros of pre-tax charges in the first half, bringing back popular models such as Jeep Cherokee SUV, and refocusing towards hybrid and petrol vehicles after a previous hard push towards electrification.
In the July-September period, net revenue amounted to 37.2 billion euros, mostly driven by strong performances in its main markets, North America and Europe, in an initial vindication of the turnaround efforts.
The result was in line with a Reuters poll of analysts.
($1 = 0.8575 euros)
(Reporting by Giulio Piovaccari in Milan and Gilles Guillaume in Paris; Editing by Alvise Armellini, Josephine Mason and Emelia Sithole-Matarise)
