Stellantis slashes 2024 profit forecast

Stellantis slashed its 2024 profit forecast.

Its new forecast considers its decision to “enlarge remediation actions” to address performance issues in North America. The legacy automaker added that its revised 2024 financial guidance also considers the competition from China’s auto industry. 

Below are Stellantis’ revised 2024 market outlook and financial guidance. 

• Adjusted operating income (“AOI”) margin – Expected to be between 5.5 – 7.0% for the FY 2024 period, down from the prior “double-digit.” Roughly two-thirds of the reduced AOI margin is driven by corrective actions in North America. Other contributors include lower-than-expected sales performance across most regions in the second half of the year.
• Industrial free cash flow – Expected to range from -€5 billion to -€10 billion, from prior “Positive”. This primarily reflects the substantially lower AOI outlook and the impact of temporarily elevated working capital in the second half of 2024.

“The Company has accelerated its planned normalization of inventory levels in the U.S., targeting no more than 330,000 units of dealer inventory by year-end 2024, from a prior timing objective of the first quarter of 2025. 

“Actions include North American shipment declines of more than 200,000 vehicles in the second half of 2024 (up from 100,000 prior guidance), compared to the prior year period, increased incentives on 2024 and older model-year vehicles, and productivity improvement initiatives that encompass both cost and capacity adjustments,” stated Stellantis. 

On Monday, September 30, Stellantis shares dropped after it released its profit forecast. The legacy automaker has been facing backlash in the United States from the United Auto Workers union and shareholders in the United States.

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