Stellantis Returns to Profit but Europe Drag Reignites Doubts Over Filosa Turnaround

Stellantis swung back to a quarterly profit as a resurgent North American business drove revenues higher, but a squeeze on European margins caused by intensifying Chinese competition left earnings short of expectations and sent the shares sharply lower.

The owner of Jeep, Peugeot, Fiat and Ram reported net profit of €293 million for the second quarter, a marked recovery from a €1.87 billion loss a year earlier, when one-off charges dominated the accounts. Net revenues climbed 13 per cent to €43.5 billion. Yet adjusted operating income of €773 million, though nearly quadruple the prior year, fell well short of the roughly €914 million analysts had forecast, and the stock dropped more than 8 per cent before paring losses to around 5 per cent.

The regional split laid bare the group's dependence on America. North American shipments jumped 38 per cent, driven by refreshed trucks and utility models including the Ram 1500 and Jeep Grand Wagoneer, lifting regional revenues by nearly a third. Enlarged Europe, by contrast, was flat and the only region to post a negative operating margin, hit by weak pricing, higher raw-material costs and the advance of Chinese brands such as BYD, Xpeng and Geely with cheaper hybrid and electric models. The group-wide operating margin was a thin 1.8 per cent.

Chief executive Antonio Filosa reaffirmed full-year guidance and pointed to progress on the FaSTLAne 2030 strategy, which earmarks €60 billion of investment through 2030 and concentrates roughly 70 per cent of spending on the Jeep, Ram, Peugeot and Fiat brands. He cautioned that a full turnaround would take time.

The headwinds remain considerable. Stellantis warned that net tariff costs could reach €1.2 billion this year, and continues to absorb the drag from recalls, including a recent action covering more than a million Jeep Wrangler and Gladiator vehicles. A third-quarter summer production shutdown means second-half earnings will be weighted heavily toward the final quarter.