Stellantis says chip shortage caused 11% cut in Q1 output; revenue rose 14%

MILAN -- Stellantis, the new auto group formed from the merger of Fiat Chrysler Automobiles and PSA Group, said first-quarter revenue rose 14 percent to 37 billion euros ($44.5 billion).

Vehicle shipments rose 12 percent to 1.61 million during the quarter, the company said in a statement on Wednesday.

Citi analysts described the results as "solid," adding that "overall it seems likely that Stellantis profitability is running ahead of expectations."

But production losses due to the industry's microchip shortage prevented a stronger rebound from industrywide plant shutdowns to halt the spread of COVID-19 in March of last year.

Lost output amounted to around 11 percent of planned production in the first three months, or about 190,000 units out of 1.58 million, Stellantis said.

The automaker expects the global shortage of semiconductors to affect production this quarter more heavily than in the first three months. It said it had "limited visibility" over the impact on its full-year results.

"We do expect it [the shortage] to improve in the second half, but clearly I think it would be naive to expect it to just disappear," Chief Financial Officer Richard Palmer told reporters on a conference call on Wednesday. "It is possible that it will leak into 2022," he added.

The chip shortage is currently affecting eight out of the group's 44 assembly plants, Palmer said.

Palmer said the disruption in semiconductor supplies was not affecting the group's integration plan. The plan "is going ahead extremely positively" and is "very much on target," he said.

CEO Carlos Tavares is under pressure to achieve billions of euros in savings from the tie-up between FCA and PSA.

The challenge has been amplified by the effects of the pandemic on consumer spending and the worldwide chip shortage that is reverberating through the entire car industry.

Stellantis does not report earnings on a quarterly basis. In Europe, BMW and Daimler have published better-than-expected results for the quarter, while Ford Motor forecast a $2.5 billion hit to earnings from scarce chip supplies. Volkswagen Group reports earnings Thursday.

Stellantis maintained its outlook for adjusted operating income margin of 5.5 percent to 7.5 percent, up from 5.3 percent last year.

About 80 percent of its targeted 5 billion euros in annual savings will be achieved by the end of 2024, the company has said.

Stellantis reiterated that it expects industry sales to grow by 10 percent in Europe this year and 8 percent in North America.

The company said its new Jeep Grand Wagoneer and a next-generation Grand Cherokee remain on track for production late in the second and third quarters, respectively.

Reuters and Bloomberg contributed to this report