Stellantis confirms 2021 margin target despite Q3 drop in sales

MILAN — Stellantis confirmed its full-year target for a 10 percent operating profit margin despite a 14 percent fall in third-quarter sales due to the microchip supply crisis.

Revenue in the quarter was 32.6 billion euros ($37.8 billion), Stellantis said in a statement on Thursday. Vehicle shipments fell 27 percent to 1.131 million.

Like most automakers, Stellantis was forced to idle some production lines in the quarter due to the lack of automotive semiconductors. The automaker lost 30 percent of its planned production — or 600,000 vehicles — during the quarter.

“The level of chip shortage was probably slightly higher that what we had expected when we last spoke to the market in August,” Chief Financial Officer Richard Palmer said.

The full-year toll of lost production due to the chip crisis would top a previous forecast of 1.4 million units, he said.

Palmer said the company was seeing a “moderate” improvement on the chip supply front in October compared with the previous month and expected such trend to continue through the fourth quarter.

“Visibility on semiconductors continues to be a difficult subject for the industry,” Palmer added.

Palmer said Stellantis forecasts a moderate improvement in shipments in the final quarter. “We see positive pricing across all regions,” he said, adding he saw good progress on post-merger synergies and cost management.

Palmer confirmed the full-year target for an adjusted operating profit margin of about 10 percent, assuming no further deterioration in semiconductor supply and no further significant COVID-19 lockdowns in Europe or the U.S. The forecast was raised in August to 10 percent from between 5.5 percent and 7.5 percent after strong first-half results, which included record margins in North America and progress on cost savings.

Stellantis was created in January from the merger of Fiat Chrysler Automobiles and PSA Group. The automaker does not release quarterly profit figures. In the first half, its adjusted margin was 11.4 percent. The 2020 margin was 1.5 percent, a pro forma result because in 2020 FCA and PSA operated independently.

Stellantis revised its full-year industry growth outlook for some of its regions. The company lowered the outlook for North America, South America and Europe, while improving the forecast for the Middle East and Africa region. It kept the outlook unchanged for India, and Asia Pacific and China.

EDITOR’S NOTE: Stellantis reported revenue of 32.6 billion euros, or $37.8 billion. A previous version of this story used incorrect revenue figures.