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PSA Peugeot Citroen S.A (PinkSheets: PEUGY) Q3 Revenue Tumbles Despite Market Share Growth

Contributed by: Justice Sirikah
Date: Oct 21, 2009

A draw back to the light side is slowly coming into view for the shares of PSA Peugeot Citroen S.A (PinkSheets: PEUGY, PEUGY message board) in tune with a below-the-forecast 7.7 percent third quarter revenue reduction reported Wednesday. Europe’s second biggest automaker by volume said this quarterly decline which came in despite an increase in market share underscores a mild recovery in the major auto markets, alongside a 2.6 percent negative effect of a stronger euro as well as a 2.5 percent adverse product mix impact.

At the same time as the company’s unit sales leapt 10 percent ahead of the July – September period last year to 788,000 cars, this year’s third quarter revenue dived to $17.6 billion.

The result was less than the $19 billion of the same period last year and below market anticipations of $18.87 billion. On a positive note, this year’s third quarter revenue was better than the 18.9 and 24.9 percent drop posted during the second and first quarter. Separately, automotive revenues came down 4.1 percent to $13.8 billion, while the carmaker’s Banque PSA Finance division tumbled 14 percent to hit a mark of $684 million.

The manufacturer saw its competitive strength in the European auto sector up 13.4 percent in the quarter ended September from 12.9 percent of the corresponding time span last year, a feat founded upon the success of the cash-for-clunkers program, particularly in the UK, France, Germany and Italy. However, the scheme which involves incentives to trade in used vehicles for new ones with lower greenhouse gas emissions failed to reach the desired end in Eastern and Central Europe, as well as Russia where markets declined by 35.7 percent and 55.8 percent respectively.

This time around Peugeot Citroen was not at liberty to give guidance for the year to the end of December 2009, although it is on record saying it is looking to an operating loss within the range of $1.5 billion and $3 billion. By the lunchtime trading the company’s stock was selling for $34.64 in the U.S, representing a 3.38 downfall from the prior day’s closing price of $35.85.