Stellantis
looks set to emerge from the six-week United Auto Workers strike with less damage than
Ford Motor
and
General Motors.
Overall, performance looks a little better than peers.
Tuesday morning, Chrysler parent
Stellantis
(ticker: STLA) beat revenue expectations in the third quarter but flagged a €3 billion ($3.2 billion) hit to sales from the six-week UAW strike.
Revenue rose 7% to €45.1 billion, beating analysts’ estimates for €43.2 billion, according to FactSet. The jump reflected greater volumes and consistent pricing power, Stellantis said.
Sales of battery electric vehicles rose 37% year over year. U.S. BEV sales rose about 32% year over year at General Motors (GM) and about 15% at Ford Motor (F).
The impact of the strike on profits at
Stellantis
is expected to be less than €750 million ($797 million), Chief Financial Officer Natalie Knight said on a media call, Dow Jones Newswires reported.
In comparison, this past week, Ford reported a $1.3 billion hit to profit, while GM reported an $800 million impact. “For us, we are a big global company, so [North America] is part of the scheme but it’s very different than what it is for our competitors,” Knight said.
Stellantis stock rose 2.8% in premarket trading.
Stellantis, which has now reached tentative agreements with both the United Auto Workers and Canada’s Unifor, said work stoppages have negatively impacted revenue by €3 billion ($3.2 billion), compared to planned production, through October.
Despite the tentative deal to end the UAW strike, the fourth quarter will still be impacted given that the industrial action has lasted for the whole of October. However, Stellantis was still able to beat revenue estimates in the third quarter despite two weeks of strikes.
Unifor’s strike action at Stellantis plants lasted just a matter of hours early Monday as both parties quickly returned to the negotiating table and reached a deal.
A combination of the strikes coming to an end, a revenue beat, and a smaller impact on profit than its rivals looks set to boost the stock.
Management hosts a conference call at 9 a.m. Eastern time for investors and analysts to discuss results. The outlook for sales amid rising interest rates will be on everyone’s mind.
Coming into Tuesday’s trading, Stellantis stock is up about 33% over the past 12 months, while the
S&P 500
and
Dow Jones Industrial Average
are up about 8% and 1%, respectively.
Write to Callum Keown at callum.keown@barrons.com and Al Root at allen.root@dowjones.com
Read the full article here