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Investing.com -- Stellantis (NYSE:STLA) said on Wednesday it expects to return to revenue growth and generate positive cash flow in 2025, but the company’s shares fell on soft results for the second half (H2) of 2024 and a light EBIT margin guide.
The stock dipped around 5% in Milan trading.
Although the print pointed to signs of improvement, it did not fully ease investor concerns, as European automakers continue to grapple with high costs, sluggish demand, and strong competition from China.
"We are firmly focused on gaining market share and improving financial performance as 2025 progresses," said Stellantis Chairman John Elkann in a statement. Elkann has been leading the company since CEO Carlos Tavares stepped down in December.
Stellantis does not expect a significant rebound in profitability this year, forecasting a "mid-single digit" margin for adjusted EBIT in 2025. That aligns with the 5.5% margin it recorded in 2024, a sharp drop from 12.8% in 2023. The consensus estimate for 2025 is 6.4%.
The latest figure is also at the lower end of the range the company had projected in September, following a surprise profit warning that rattled investors and ultimately contributed to Tavares’ departure.
“Given consensus of 6.4% margin, we expect some double-digit downward adjustment depending on the tone of the call,” Morgan Stanley (NYSE:MS) analysts said in a post-earnings note.
Last year, the automaker burned through more than 6 billion euros ($6.3 billion) in cash, while total revenue declined 17% to 157 billion euros. Global shipments fell 12%, which Stellantis attributed to "temporary gaps" in its product lineup and "now-complete inventory reduction initiatives,” it said on Wednesday.
In the second half of 2024, the company’s adjusted EBIT slumped to 185 million euros, a sharp drop from 10.2 billion euros in the same period a year earlier, and a far cry from the 877 million euros consensus estimate.
Total (EPA:TTEF) sales for that half stood at 71.9 billion euros, above the 70.8 billion euros expected by analysts.
“As we expected in our Q4/24 preview, Stellantis posted a soft H2/24,” said RBC Capital Markets analysts.
The profitability guidance for 2025 also “appears light, and could put some downward pressure on shares,” they added.
Stellantis proposed a dividend of 0.68 euros per share based on its 2024 performance.