Stellantis says it made $12B in net profit in first half of year
Eric D. Lawrence, Detroit Free Press
Updated 5 min read
Jeep-parent Stellantis said it made $12 billion in net profit for the first half of 2023. The company reported its corporate earnings on Wednesday.
Stellantis said it set new records for its financial results in the first half of 2023, including $12 billion (10.9 billion euros) in net profit.
The automaker, which owns the Jeep, Ram, Chrysler, Dodge, Fiat, Alfa Romeo and Maserati brands, posted year-over-year and double-digit percentage gains across a range of metrics in its earnings report released Wednesday.
The company’s global regions posted positive results, except for lower shipments and revenues in China, India and Asia Pacific but that region still managed to boost its operating income and margin.
Stellantis CEO Carlos Tavares, in a statement, called the results "outstanding" and said they support the company’s long-term sustainability and will help it meet its goals in its Dare Forward 2030 business plan for the years ahead.
“It takes a united effort and open mindset across all our employees to embark on our no-compromise transformation journey while protecting the company from external challenges. I want to express my gratitude to each and every employee and I am proud to say that the teams are delivering across multiple dimensions. We are well-positioned for the remainder of 2023 and beyond,” Tavares said.
That positioning includes the company's electrification efforts. The automaker said its global battery electric vehicle and low-emission vehicle sales were "up 24% year-over year to around 169,000 units and up 28% year-over-year to around 315,000 units, respectively."
Fain and UAW Vice President Rich Boyer, the head of the union's Stellantis Department, blasted the report in a statement.
“There are healthy profits and then there are obscene profits. These record profits are obscene, and they come off the backs of underpaid workers and broken communities," Fain said, noting that union worker raises in recent years did not compare to Tavares' compensation increases. "As Stellantis made its megaprofits, it kept our assembly plant in Belvidere, Illinois sitting idle. Workers who’ve given their lives to the company have no idea what the future holds."
Fain was referencing the situation at the Belvidere Assembly Plant, where Stellantis made the Jeep Cherokee SUV. The company announced its intent in December to idle the plant, citing the high cost of the transition to electrification. Tavares on Wednesday indicated that the Belvidere plant's fate would be a subject of bargaining.
Boyer said workers are the company's profit engine but have been getting the "shaft" for years.
“Even when plants like Belvidere make high-quality product and solid profits, Stellantis executives shut them down. These numbers show there’s no excuse for that kind of cruelty anymore. Our workers are fired up and we’re going to win what we and our communities deserve," Boyer said.
Stellantis’ Detroit Three rivals also report earnings this week. On Tuesday, General Motors said it made $2.5 billion in net income for the second quarter, a 53% jump over the same period in 2022. Ford is set to release its numbers on Thursday. Stellantis only reports its full earnings every six months, while the other two release quarterly earnings reports.
For the first half of the year, in comparison to the same period in 2022, Stellantis reported net revenues of $108 billion (98 billion euros), up 12% from $97.4 billion (88 billion euros); net profit of $12 billion (10.9 billion euros), up 37% from $8.7 billion (7.9 billion euros); cash flows from operating activities of $14.8 billion (13.4 billion euros), up 36% from $10.9 billion (9.8 billion euros); and adjusted operating income of $15.5 billion (14 billion euros), up 11% from $14 billion (12.7 billion euros), although with a slight dip in margin from 14.5% to 14.4%.
The company reported $54 billion (49 billion euros) in cash on hand, up from $50.9 billion (46 billion euros) along with additional debt of $32 billion (29 billion euros) up from $29.9 billion (27 billion euros), but also a stronger net financial position of $26.6 billion (24 billion euros) up from $25.5 billion (23 billion euros) in year-over-year results.
For North America, which drives much of the company’s global profits, Stellantis reported net revenues of $50.8 billion (45.9 billion euros), up 8% from $46.5 billion (42 billion euros). The company said that was a result of strong net pricing and higher volumes. The company noted that its shipments were up 7%, with higher volumes of Chrysler Pacifica, Dodge Charger and Durango and Jeep Compass offsetting lower volumes of Jeep Wrangler and Gladiator.
The company, which confirmed its full year guidance of a double-digit adjusted operating income margin and positive industrial free cash flows, said it repurchased $0.7 billion (0.7 billion euros) in shares in the first half of 2023 and expects to complete its announced $1.7 billion (1.5 billion euros) share buyback program before the end of the year.
Fain, in his statement, said the stock buyback artificially inflates the company's stock price, "further enriching company executives and the top 1%. That is $1.7 billion (1.5 billion euros) being robbed from the workers who made those profits possible and the latest in a long line of examples of how corporate greed is plundering our communities."
Markets did appear to view the earnings news positively. Stellantis stock closed Wednesday at $19.17 per share — up 3.57%, or 66 cents.
