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Investing.com -- Renault (EPA:RENA) reported a slight drop in first-quarter revenue despite higher vehicle sales, missing market expectations. The company reaffirmed its full-year guidance.
The automaker’s shares climbed more than 1% in European trading Thursday.
Revenue generated a revenue of 11.68 billion euros ($13.21 billion) for the period, down 0.3% year-over-year, and below the 11.71 billion euros expected by analysts in a company-compiled consensus.
Global sales rose 2.9% to 564,980 vehicles, driven by strong performance outside of Europe. Renault said it continues to outperform the broader auto market, despite macroeconomic headwinds.
Jefferies analysts said there was no surprise in the decline of Renault’s Q1 revenue, which is “almost a non-event.”
Revenue in the company’s automotive division slid 3% to 10.13 billion euros, also below the 10.3 billion euros expected by analysts.
The 3% decline in auto sales was driven mainly by a 2.6 percentage point drop in wholesales amid a “larger magnitude destocking of independent dealers,” analysts said. In contrast, retail sales were up 2.9% year-over-year.
To strengthen its position, Renault plans to implement further cost-cutting measures. The carmaker’s CFO Duncan Minto said the company aims to remain flexible amid the current economic uncertainty.
"We prefer to be able to protect the company and continue this strong momentum. And so we decided to postpone some projects that were not major, which would not have an impact on the range," he said.
This may include delaying the U.S. launch of a model from its Alpine brand, and maintaining tighter control over inventory levels.
Renault, which stood out last year as one of the few automakers to maintain its full-year targets, reaffirmed its goal of achieving an operating margin of 7% or higher in 2025. This includes an estimated 1 percentage point drag—about 500 million euros—linked to stricter emissions regulations in Europe.