Automotive Titan Stellantis Turns Profitable in Q1 but Shares Plunge

Automotive manufacturing giant Stellantis announced its first-quarter results on Thursday, with a net profit of 377 million euros, compared to a loss of 387 million euros in the same period of the previous year. Adjusted EBIT rose to 960 million euros, higher than Reuters' survey of 568 million euros, and significantly above the 327 million euros from the same period last year.

The core improvement comes from North America. The company's global shipments increased by 12% in the first quarter, with North America growing by 17%. The resurgence in demand for refreshed Jeep and Ram models has driven a simultaneous recovery in sales and profits. However, the stock price reaction indicates that investors are not focusing solely on profit. The company's net revenue for the first quarter was 38.13 billion euros, up 6.5% year-on-year, below market estimates of 38.49 billion euros, suggesting that the increase in shipments has not fully translated into revenue that exceeds expectations.

Europe remains a major stress point. Shipments in the region grew by 12%, with net sales increasing by only 1%. The company attributed this to negative pricing and fierce competition, implying that pricing pressure is offsetting some of the sales contributions. As Chinese car manufacturers expand in Europe, Stellantis is facing market share compression while exploring cooperation with Chinese manufacturers, including strengthening cooperation with Leap Motor and restarting the alliance with Dongfeng Motor, to address overcapacity and gain technology.

On Thursday's morning session, Stellantis' listed shares in Milan fell more than 7% and triggered an automatic trading halt. On May 21, CEO Antonio Filosa will announce the results of a global operational review, with the market paying attention to whether the company still maintains its current full-year profit margin guidance.