KEY TAKEAWAYS
- Stellantis shares are plunging after the automaker reported results that lagged both analysts’ and its own expectations as it struggles with excess inventory in North America.
- The owner of the Chrysler and Jeep brands said it is taking “decisive actions to address operational challenges” and reported a 48% year-over-year slump in first-half net profit.
- Stellantis’ weak results come at a challenging time for automakers, which are coping with cooling demand as inflation bites spending.
Stellantis (STLA) shares are plunging 8% in premarket trading Wednesday after the automaker reported results that lagged both analysts’ and its own expectations as the automaker struggles with excess inventory in North America.
The owner of the Chrysler and Jeep brands said it is taking “decisive actions to address operational challenges” and reported a 48% year-over-year slump in first-half net profit to 5.65 billion euros ($6.13 billion), and a 14% decline in revenue to EUR85.02 billion.
Those operational challenges includes its “North American share and inventory performance,” the company said. Restructuring and foreign exchange costs added to the downbeat numbers, it said.
“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 Chief Executive Officer (CEO) Carlos Tavares said.
Automakers Face Challenging Times
Stellantis’ weak results come at a challenging time for automakers, which are coping with cooling demand as inflation bites spending and falling demand for electric vehicles.
On Wednesday, Ford Motor (F) reported second-quarter earnings that also fell short of expectations and kept its full-year guidance unchanged, in contrast to rival General Motors (GM), which raised its outlook a day earlier and recorded an earnings beat, although its China losses took investors by surprise.
On Tuesday, Tesla (TSLA) posted a disappointing 45% year-over-year decline in profits, dragged by lower average selling prices.
Stellantis shares were down about 16% this year through Wednesday’s close.