PSA’s shares were down 2.8% in early trading, even though the group beat expectations on revenue by a wide margin, analysts at Jefferies said. Other French stocks were falling, as the country braces for a possible renewed lockdown.
Under CEO Carlos Tavares, PSA has focused increasingly on its more expensive and profitable models, helping it ride out falls in sales volumes.
PSA reported overall sales at 15.5 billion euros ($18.3 billion) for the July-September quarter, down 0.8% from a year earlier. Automotive revenue rose 1.2% to 12 billion euros, after ending the first half of the year down 35.5%.
PSA had said over the summer that new versions of its Peugeot 208 model and Opel’s Corsa were boosting its order books, and its focus on SUV-style cars has also helped.
PSA kept its target to reach an adjusted operating margin for its automotive division of more than 4.5% for 2019-2021, and said it would likely generate positive cash flow this year.
The group’s $38 billion merger with FCA, set to create the world’s fourth largest carmaker under the name “Stellantis”, is due to close in the first quarter of 2021.
They are set to win antitrust approval for the merger from the European Commission, sources told Reuters this week.
The proceeds will be distributed to Stellantis shareholders in cash, alongside a distribution-in-kind of the remaining Faurecia stake – a structure aimed at preventing Stellantis from gaining control of Faurecia.
Reporting by Sarah White and Gwenaelle Barzic; editing by Jason Neely and Mark Potter