Stellantis, the parent company of Chrysler, is poised to recover from the six-week United Auto Workers (UAW) strike with minimal damage compared to Ford and General Motors (GM).
In the third quarter, Stellantis surpassed revenue expectations, although it did experience a €3 billion ($3.2 billion) sales hit due to the UAW strike. However, Chief Financial Officer Natalie Knight stated on a media call that the impact on profits is anticipated to be less than €750 million ($797 million), as reported by Dow Jones Newswires.
Despite the challenges, Stellantis' stock rose by 2.8% in premarket trading.
Stellantis has reached tentative agreements with both the UAW and Canada's Unifor. The work stoppages have caused a €3 billion ($3.2 billion) negative impact on revenue compared to planned production through October.
Surpassing analysts' estimates of €43.2 billion, Stellantis reported a 7% increase in revenue to €45.1 billion. This growth can be attributed to higher volumes and consistent pricing power.
Although the tentative deal with the UAW aims to end the strike, the fourth quarter's performance will still be affected due to the strike lasting the entire month of October. Despite this, Stellantis managed to surpass revenue estimates in the third quarter, even amidst two weeks of strikes.
Unifor's strike action at Stellantis plants was brief, with both parties returning to the negotiating table and quickly reaching a deal.
With the strikes concluding, strong revenue performance, and a smaller impact on profit compared to its competitors, Stellantis is expected to experience a significant boost in its stock.
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