Stellantis Exceeds Revenue Expectations Despite Setback
Stellantis, the parent company of Chrysler, has managed to navigate the six-week United Auto Workers (UAW) strike with minimal damage compared to its competitors, Ford Motor and General Motors. Despite the setback caused by the strike, Stellantis reported better-than-expected performance in the third quarter.
In the third quarter, Stellantis’ revenue increased by 7% to €45.1 billion. This surpassed analysts’ estimates of €43.2 billion, according to FactSet. The company attributed this growth to higher volumes and consistent pricing power.
Rise in Sales of Battery Electric Vehicles
One notable achievement for Stellantis was the impressive 37% year-over-year increase in the sales of battery electric vehicles (BEVs). General Motors also experienced a 32% increase in U.S. BEV sales, while Ford Motor saw a 15% rise.
Limited Profit Impact Expected
While the UAW strike did have an impact on Stellantis’ profits, Chief Financial Officer Natalie Knight anticipates that it will be less than €750 million ($797 million). In contrast, Ford reported a $1.3 billion hit to profit, and GM reported an $800 million impact. Knight highlighted the fact that Stellantis’ global presence differentiates it from its competitors, emphasizing that North America is just one part of their overall business scheme.
Positive Market Response
Investors responded positively to Stellantis’ performance, with the company’s stock rising by 2.8% in premarket trading.
Stellantis Sees €3 Billion Revenue Impact Due to Work Stoppages
Stellantis, the global automotive company, has announced that work stoppages have had a significant negative impact on its revenue. The company estimates that it has lost €3 billion ($3.2 billion) in revenue compared to its planned production through October.
While Stellantis has reached tentative agreements with both the United Auto Workers (UAW) and Canada’s Unifor, the ongoing industrial action by the UAW will still impact the company’s performance in the fourth quarter. However, despite facing two weeks of strikes, Stellantis exceeded revenue estimates in the third quarter.
In contrast, Unifor’s strike action at Stellantis plants was swiftly resolved, lasting only a few hours as both parties quickly returned to the negotiating table and reached a deal.
The convergence of the strikes concluding, positive revenue performance, and a smaller profit impact compared to its competitors are expected to bolster Stellantis’ stock.
To discuss these results, management will be hosting a conference call at 9 a.m. Eastern Time for investors and analysts. Key topics to be addressed include sales outlook in light of rising interest rates, which are top of mind for many stakeholders.
As of Tuesday’s trading, Stellantis stock has experienced an impressive 33% increase over the past 12 months, outperforming the S&P 500 and Dow Jones Industrial Average, which have grown by approximately 8% and 1% respectively.