Stellantis expects $2.7 billion first-half loss, impacted by restructuring costs, U.S. tariffs

Globe and Mail

5 days ago

Stellantis N.V. STLA-N reported a preliminary €2.3-billion (US$2.7-billion) first-half loss as it faces the dual challenge of revamping its product ranges in Europe and the United States while also dealing with the impact of President Donald Trump's tariffs on imports of vehicles and auto parts.
Stellantis said on Monday it booked €3.3-billion in pre-tax charges for the first half as it canceled vehicle programs, including a hydrogen fuel cell project, while investing more in popular hybrid cars in Europe and large gasoline-powered models in the U.S. market.
The automaker's results were 'worse than consensus, but we think poor numbers were anticipated,' Jefferies analyst Philippe Houchois wrote in a client note.
Earlier this month, Stellantis unveiled a €17,000 hybrid Fiat 500, which the automaker is banking on to revive its ailing production in Italy.
The owner of a sprawling portfolio of brands including Fiat, Peugeot, Chrysler and Jeep, said Trump's tariffs have cost it €300-million so far as the company reduced vehicle shipments and cut some production to adjust manufacturing levels.
Stellantis' loss, versus a €5.6-billion net profit a year earlier, underscores the challenges for new CEO Antonio Filosa, who was appointed in May after a disastrous performance in the company's crucial U.S. market in 2024 forced the ouster of former boss Carlos Tavares.
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Under Tavares, industry experts said Stellantis had priced itself out of the U.S. market and failed to update popular models, leaving the company with vast numbers of unsold cars. Stellantis' North American sales fell 25 per cent year-on-year in the second quarter, it said on Monday, showing the automaker still has a long way to go.
Stellantis also said that it was seeing weak demand in Europe, especially for vans.
The automaker's shares fell 2.1 per cent in morning trade, and are down 37 per cent since the start of the year.
Rival Renault's shares fell as much as 18 per cent last week when it issued a profit warning citing softening demand for cars and vans in Europe.
Last year, Stellantis imported over 40 per cent of the 1.2 million vehicles it sold in the United States, mostly from Mexico and Canada. In April this year, the company said it had reduced vehicle imports in response to tariffs and would calibrate 'production and employment to reduce impacts on profitability.'
In April, Stellantis suspended its profit forecasts for 2025 due to uncertainty about tariffs, but said on Monday it was publishing its unaudited preliminary financial data to align analyst forecasts with the group's actual performance.
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The group's first-half revenue totalled €74.3-billion, down from €85-billion in the first half of 2024, but up from the second half of 2024 when revenue totalled €71.8-billion.
'Results reflect the early stages of actions being taken to improve performance and profitability, with new products expected to deliver larger benefits in the second half of 2025,' JPMorgan analysts said in a note.
Stellantis said it burnt through €2.3-billion of cash in the first half.
Overall second-quarter shipments fell by 6 per cent compared to the same period last year, to an estimated 1.4 million vehicles, it said.