PARIS: Fourteen months after Stellantis NV parted ways with a chief executive officer (CEO) who surprised investors with wayward results, his successor has pulled a similar move.
CEO Antonia Filosa announced €22.2bil (US$26bil) in charges, much of which were linked to unwinding his predecessor Carlos Tavares’ bets on electric vehicles (EVs) that were destined to be unprofitable.
Beneath that headline figure, though, Stellantis also released far weaker earnings than analysts had anticipated — based in part on reassurance Filosa offered only two months ago.
The disclosures sent the Jeep and Fiat maker’s stock plunging 25% intraday in Milan trading.
While much of Stellantis’ slide from an all-time high reached less than two years ago occurred under Tavares, who caught investors off-guard with a profit warning toward the end of his tenure, the rout has only worsened under Filosa.
The company has now lost almost €70bil of market value since March 2024.
The extreme move in Stellantis stock relative to how Ford Motor Co and General Motors Co shares swung following their disclosures of similar EV-related writedowns is telling, Bernstein analyst Stephen Reitman wrote in a report to clients.
It reflects “the chasm that Stellantis management needs to bridge to reestablish trust,” he said.
Filosa, 52, said at an investor event in early December that the company was on track to meet its full-year guidance.
Last Friday, however, the company warned it’s expecting to report a second-half deficit of as much as €1.5bil, “much worse” than expected, Evercore ISI analyst Chris McNally wrote in a report.
He also called Stellantis’ outlook for 2026 “vague” – the manufacturer forecast a mid-single-digit increase in revenue, and a low-single-digit adjusted operating income margin.
Alongside the €22.2bil in writedowns, Stellantis is selling its 49% stake in a Canadian joint venture to partner LG Energy Solution Ltd for just US$100, wiping out virtually all of the US$980mil the carmaker had invested in the operation.
A significant chunk of the charges Stellantis announced was unrelated to Filosa’s moves to cancel EVs that are falling short on both sales and profitability.
The company also said it will take a 4.1bil hit related to how it provisions for warranty expenses, citing quality issues blamed on previous management.
Another €1.3bil of other charges mainly relate to previously announced job cuts in Europe.
Filosa has touted traction at Stellantis’ all-important Ram truck and Jeep SUV brands, with pickup buyers taking interest both in the Hemi V-8 engine and the Cherokee model brought back last year. Jeep just snapped a six-year streak of declining US sales, with deliveries rising 4% in the fourth quarter, when many other brands lost momentum.
Investors who are bullish on Stellantis stock “will say this is a ‘kitchen sink’ moment and could be a cleaning event,” Tom Narayan, an analyst at RBC Capital Markets, said in a note.
“We await further evidence of a turnaround in business fundamentals, however.” — Bloomberg
