European car giant Stellantis reported a 4 billion euro ($4.5 billion) industrial free cash flow deficit for the third quarter, even as it posted a slight increase in revenue and maintained its financial targets for 2026 under a sweeping turnaround plan. Shares rose nearly 6% in Milan and in New York premarket trading after the results, defying expectations that the automaker might cut guidance like some rivals.
Stellantis, the owner of Chrysler and Jeep, said on Wednesday that third-quarter revenues rose 1% to 37.6 billion euros from a year earlier, while adjusted operating income jumped 184% to 256 million euros. The company’s industrial free cash flow improved to negative 4 billion euros from negative 4.3 billion euros a year prior.
CEO Antonio Filosa said in a press release that during the quarter the company made progress on the early execution of its FaSTLAne 2030 plan, launching new products, accelerating partnerships, and delivering improvements in manufacturing and quality. Stellantis also reconfirmed its target to achieve positive free cash flow next year, a key focus for investors.
RBC Capital Markets analyst Tom Narayan said in an investor note Wednesday that the quarter was soft but consensus expectations were far lower. He highlighted that the maintained 2026 guidance was the key, while other automotive original-equipment manufacturers and suppliers are cutting on elevated costs. Stellantis’ 2026 guidance includes a mid-single-digit percentage increase in net revenue and a low-single-digit adjusted operating margin.
The results come as Stellantis implements a 60 billion euro turnaround strategy after years of sales declines, especially in North America. The plan calls for 36 billion euros in new investment across its brand portfolio, with 60% directed to its struggling North America operations. It also plans to introduce new vehicles, refresh models, and incorporate new technologies.
Like other European automakers, Stellantis faces intensifying competition in China from domestic brands such as Xiaomi, BYD and Geely. This week German luxury carmaker Porsche said it would reduce its exposure to China, while Mercedes-Benz reported a slump in third-quarter car sales due to a challenging market environment in the country. Earlier this month Filosa told CNBC that European regulators need to do more to incentivize carmakers to manufacture in the region to fend off Chinese rivals, calling for regulation that “incentivizes, rewards, and protects the ones that are able to demonstrate that they design cars, engineer cars.”
Analysis
Why This Matters
- Stellantis is one of the world’s largest automakers, and its financial health affects thousands of workers across Europe and North America.
- The 60 billion euro turnaround plan is one of the most ambitious in the industry, with heavy investment concentrated in North America, a market where Stellantis has lost ground.
- Maintaining 2026 guidance while other European automakers cut costs signals a potential divergence in strategy and confidence.
Background
Stellantis was created in 2021 from the merger of Fiat-Chrysler and PSA. It has since faced declining sales, particularly in North America, where its legacy brands struggled. The FaSTLAne 2030 plan, announced earlier this year, aims to reverse that trend through massive product investment and operational improvements. Competition from Chinese electric-vehicle makers has added pressure across the European auto industry.
Key Perspectives
- Antonio Filosa, Stellantis CEO: emphasised that the company made progress in the early execution of its turnaround plan, launching new products and achieving meaningful improvements in manufacturing and quality.
- Tom Narayan, RBC Capital Markets analyst: described the third quarter as soft but noted that consensus expectations were far lower, and said the key positive was the maintained 2026 guidance while other automakers cut costs.
What to Watch
- Whether Stellantis can deliver positive free cash flow next year, as it has promised investors.
- The pace of its North America investment and the market reception of new models.
- How European regulators respond to calls for protective measures against Chinese competition.
Checked
12 claims in this story checked against 1 source: 11 supported.
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- SupportedStellantis reported a 4 billion euro cash shortfall in the third quarter.US Top News and Analysis: “Stellantis reported a 4 billion euro ($4.5 billion) cash shortfall in the third quarter”
- SupportedStellantis maintained its 2026 guidance.US Top News and Analysis: “Wall Street reacted positively to the results as well as the company's ability to maintain its 2026 guidance”
- SupportedStellantis’ third-quarter revenues rose 1% to 37.6 billion euros from a year earlier.US Top News and Analysis: “Third-quarter revenues rose 1% to 37.6 billion euros from a year ago”
- SupportedShares rose nearly 6% in Milan and in New York premarket trading after the results.US Top News and Analysis: “Stellantis shares Wednesday were up roughly 6% in Milan as well as premarket trading in New York”
- Not in the sourcesThe share rise defied expectations that Stellantis might cut guidance like some rivals.US Top News and Analysis: “Wall Street reacted positively to the results as well as the company's ability to maintain its 2026 guidance as other European automakers struggle.”
- SupportedAdjusted operating income jumped 184% to 256 million euros.US Top News and Analysis: “adjusted operating income rose 184% to 256 million euros from 90 million euros a year earlier”
- SupportedIndustrial free cash flow improved to negative 4 billion euros from negative 4.3 billion euros a year earlier.US Top News and Analysis: “its industrial free cash flow improved to negative 4 billion euros, up from negative 4.3 billion the year prior”
- SupportedCEO Antonio Filosa said the company made progress on the early execution of its FaSTLAne 2030 plan, launching products, accelerating partnerships and improving manufacturing and quality.US Top News and Analysis: ““During the quarter, we continued to make progress in the early execution of our FaSTLAne 2030 plan, launching new products, accelerating partnerships as planned, and delivering meaningful improvements in manufacturing and quality,” Stellantis CEO Antonio Filosa said in a press release.”
- SupportedStellantis reconfirmed its target to achieve positive free cash flow next year.US Top News and Analysis: “Stellantis also reconfirmed its target to achieve positive free cash flow next year”
- SupportedRBC Capital Markets analyst Tom Narayan said the quarter was soft but consensus expectations were far lower, and that maintaining guidance was key while other auto makers and suppliers were cutting on elevated costs.US Top News and Analysis: ““Q3 was soft, but consensus expectations were far lower. Key here is that '26 Guidance was maintained while other auto OEMs and suppliers are cutting on elevated costs,” RBC Capital Markets analyst Tom Narayan said Wednesday in an investor note.”
- SupportedStellantis’ 2026 guidance includes mid-single-digit percentage revenue growth and a low-single-digit adjusted operating margin.US Top News and Analysis: “Stellantis' 2026 guidance includes a mid-single-digit percentage increase in net revenue and a low-single-digit adjusted operating margin.”
- SupportedFilosa called for regulation that “incentivizes, rewards, and protects the ones that are able to demonstrate that they design cars, engineer cars.”US Top News and Analysis: “Filosa called for regulation that “incentivizes, rewards, and protects the ones that are able to demonstrate that they design cars, engineer cars.””
