Ram, Jeep-maker Stellantis stock sinks on disappointing results, following those of Big 3 rivals GM, Ford
Stellantis (STLA) stock tumbled following lackluster first-half results, the final Big Three automaker to disappoint investors this earnings season. Stellantis — the name behind brands including Dodge, Jeep, and Chrysler — blamed bloated inventories, heavy discounting, shifting product strategies, and restructuring costs for shortfall.
Overall, Stellantis reported net revenues of €85.0 billion ($92.21 billion), slightly below the Bloomberg consensus estimate of €87.127 billion ($94.62 billion), a drop of 14% compared to a year ago. Stellantis’s net income fell 48% to €5.6 billion ($6.1 billion), widely missing the €7 billion ($7.6 billion) Bloomberg consensus estimate.
Stellantis shares trading in New York fell more than 7% in early trade on Thursday.
Stellantis’s other key metrics also disappointed. Adjusted operating income (AOI) fell to €8.5 billion ($9.221 billion), down a whopping €5.7 billion, or 60% compared to a year ago. AOI margin, a measure of profitability, fell 440 basis points from a year ago to 10%, with Stellantis attributing the drop to a decline in shipments, product mix, and FX headwinds.
“The Company’s performance in the first half of 2024 fell short of our expectations, reflecting both a challenging industry context as well as our own operational issues,” Stellantis CEO Carlos Tavares said in a statement. “We have significant work to do, especially in North America, to maximize our long-term potential.”
Tavares noted on the analyst call following the release of results that the company was “in a transition, difficult period,” meaning it will perform “corrective action” as it looks to launch several new products; move older, bloated inventory (especially in North America); and continue with its EV game plan of a “multi-energy” strategy — meaning several types of electrified and internal combustion powertrains.
“We are pushing hard in North America; it’s our biggest territory,” CFO Natalie Knight added on the call.
Combined global shipments for the automaker hit 2.931 million units, down 12% compared to a year ago. North American shipments fell 18%, however, and Stellantis said it may kill off unpopular models and revive models like the Dodge Charger to gain back market share. Stellantis will also cut prices and production in North America to improve sales and reduce inventory bloat.
Investor disappointment in Stellantis’s performance comes on the heels of discouraging results posted by Big Three rivals GM and Ford earlier this week.
GM, despite an earnings beat and guidance boost, saw its shares fall as the company once again pushed back an EV plant start date, with analysts also concerned the company's earnings peak was behind it.
Ford’s second quarter performance was also punished by the market, as its big profit miss caught investors off guard. Ford blamed rising warranty and recall losses for the miss, but said its guidance for the rest of the year was intact. Ford also lost over a billion dollars in adjusted EBIT in its Model e EV business, but the company’s EV sales were still strong.
The two other large multinational automakers, Volkswagen and Toyota, will report results next Thursday, Aug. 1.
Pras Subramanian is a reporter for Yahoo Finance covering the auto industry. You can follow him on X and on Instagram.
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