(Bloomberg) -- Stellantis NV warned the global semiconductor shortage will deteriorate further from the first three months of the year, when the crunch curbed planned output by 11%.
The company formed from the merger between Fiat Chrysler and PSA Group said things will get worse in the second quarter before showing some signs of improvement in the latter half of the year, according to an earnings statement Wednesday.
Speaking on a call, Chief Financial Officer Richard Palmer cautioned that the effects could linger into 2022.
“The visibility is still relatively limited,” Palmer said. “It would be imprudent to assume that the issue is just going to go away.”
First-quarter revenue increased 14% to 37 billion euros ($44.5 billion) on a pro-forma basis, while combined vehicle shipments on that basis rose 12% to 1.61 million. The semiconductor shortage clipped planned production by 190,000 units in the first quarter before rolling halts of some assembly lines, and Palmer said the hit will likely be more pronounced still in the second quarter.
Chief Executive Officer Carlos Tavares is under pressure to achieve billions of euros in savings from the tie-up between the two carmakers. The challenge has been amplified by the effects of the pandemic on consumer spending and the worldwide chip shortage that’s reverberating through the entire car industry.
Stellantis doesn’t report earnings on a quarterly basis. In Europe, BMW AG and Daimler AG have published better-than-expected results for the quarter, while Ford Motor Co. forecast a $2.5 billion hit to earnings from scarce chip supplies. Volkswagen AG reports earnings Thursday.
Stellantis maintained its outlook for adjusted operating income margin of 5.5% to 7.5%, up from 5.3% last year. About 80% of itstargeted 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% in Europe this year and 8% 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.
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