Stellantis posts modest Q3 operating income but burns €4 billion

Stellantis Reports Modest Q3 Income as Cash Outflow Hits €4 Billion

Stellantis Q3 Financial Performance Overview

By Giulio Piovaccari and Gilles Guillaume

MILAN, Oct 28 (Reuters) - Stellantis on Wednesday posted a slight increase in operating income in the third quarter as the automaker presses ahead with a slow turnaround process, which still generated a €4 billion ($4.45 billion) industrial cash outflow in the period.

Turnaround Efforts and Strategic Plans

Following two years of sliding sales and profitability, CEO Antonio Filosa in May promised dozens of new models, cost cuts and deeper cooperation with Chinese partners as part of a new business plan through 2030.

Investor Sentiment and Market Challenges

However, investors still need to be convinced that the Franco-Italian automaker, which in February announced EV-related impairments for over €22 billion euros, is on the path to sustained recovery.

Earlier this month its shares sank to their lowest level since the group's formation in early 2021 through the Fiat Chrysler-Peugeot merger.

Quarterly Earnings and Revenue Breakdown

Weak Quarter Results

WEAK QUARTER

The Fiat-to-Jeep maker said its adjusted earnings before interest and taxes (EBIT) amounted to €256 million in the July to September period, from €90 million a year earlier.

That was broadly in line with a consensus of €191 million from a Reuters poll of analysts, who were bracing for a weak quarter before an expected stronger performance in the final part of the year.

Regional Revenue Performance

Third-quarter revenues were little changed at €37.6 billion, with slight increases in Europe and South America and a 3% drop in North America, which has historically been Stellantis' most profitable market.

Cost Cutting Initiatives and Future Outlook

Acceleration of Cost Cutting Plan

COST CUTTING PLAN ACCELERATES

The company on Wednesday confirmed its 2026 forecasts and a closely-watched target to return to positive cash flow generation in 2027, as it books benefits for a group-wide cost-cutting plan CEO Filosa launched this year.

"Our Value Creation Program has ramped up rapidly, with positive contributions being recognized in the quarter, and we remain on track to implement at least 40% of the total €6 billion in run-rate efficiencies by the end of this year," he said in a statement.

Projected Savings and Maserati Business Plan

The company said it expected to make savings in the fourth quarter in the "mid-hundreds of millions of euros" area, or around €500 million, approximately double the amount realized in the third quarter.

Stellantis on Wednesday also announced it would present a new business plan for its struggling Maserati luxury brand on December 10.

($1 = 0.8981 euros)

(Reporting by Giulio Piovaccari in Milan and Gilles Guillaume in Paris, editing by Alvise Armellini)