Stellantis reported a 13% decline in revenue and a 94% drop in adjusted operating income for the first half of the year. The company expects revenue to improve in the second half, with a low-single-digit adjusted operating income margin. Europe’s profitability disappointed, while North America showed improvement from the previous year.

The outlook for Stellantis falls short of expectations, with Europe experiencing break-even profitability and North America reporting an operational loss of EUR 951 million. Despite restructuring efforts and cost reductions, weak free cash flows are expected in the short term. Significant reorganization is needed for European operations to improve.

Stellantis incurred over EUR 500 million in restructuring costs in Europe, focusing on workforce reductions. The reintroduction of high-volume products based on consumer demand is a positive step. Continued investment in financial services and restructuring efforts will be key for the company’s future growth and profitability.

Read more at Morningstar: Stellantis Earnings: Gradual Road to Recovery