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Stellantis Reports 70% Profit Drop Amid Revenue Challenges

Stellantis faces significant profit decline with net income dropping 70%. The company anticipates modest growth in fiscal 2025 despite current revenue struggles.

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AI Rating:   4

Profit and Revenue Performance

Stellantis N.V. has reported a substantial decrease in profitability for fiscal 2024, stating that its net profit attributable to owners of the parent fell by 70% to 5.52 billion euros, a significant drop from 18.63 billion euros in the previous year. This decline raises concerns about the company's financial health and operational efficiency.

The earnings per share (EPS) also reflect this downturn, with a reported EPS of 1.84 euros, down 69% from 5.94 euros a year ago. This poor performance in EPS can negatively impact investor sentiment and stock prices as it signals lower profitability on a per-share basis.

Additionally, the adjusted earnings per share fell to 2.48 euros, compared to 6.42 euros in the prior year. These figures imply substantial challenges in maintaining operational profitability.

The revenue outlook is similarly bleak, with net revenues of 156.88 billion euros marking a 17% decrease from last year's revenue of 189.54 billion euros. This decline in revenue indicates weak sales performance and could lead to a further decrease in stock prices due to investor concerns over future growth prospects.

Margins and Operating Income

The adjusted operating income also witnessed a dramatic fall, declining by 64% to 8.65 billion euros. Furthermore, the adjusted operating income margin decreased by 730 basis points year-over-year to a bare 5.5%. These shrinking margins are alarming as they suggest a decline in operational efficiency and cost management.

Future Outlook

Looking ahead, Stellantis projects some positive developments for fiscal 2025, anticipating mid-single digits revenue growth and positive industrial free cash flows. However, these projections come amid elevated industry uncertainties, indicating that while the company may have a recovery plan, risks remain substantial.

The upcoming appointment of a new Chief Executive Officer is another point of uncertainty. A change in leadership could either positively or negatively affect the company’s direction and operational execution.

Stocks:  STLA