PSA Peugeot Citroen, Europe's second-biggest carmaker, reported a bigger-than-expected second-half loss at its main auto division as price cuts countered a recovery in deliveries.
The unit's operating loss was 353 million euros ($486 million), the Paris-based company said in a statement today. Morgan Stanley analyst Adam Jones had predicted a 145 million- euro loss. Peugeot's net loss was 199 million euros, compared with the 1.08 billion-euro loss it reported a year ago.
"The results are pretty disappointing," said London-based Credit Suisse analyst Stuart Pearson, who has an "underperform" rating on Peugeot shares. "Despite factories running at 92 percent capacity in the second half, they're still losing money in autos -- and that has to be a concern."
European governments countered the economic slump last year with consumer incentives to scrap old cars and buy new ones. The phasing-out of those incentives will lead to a 9 percent market contraction in 2010, Peugeot Chief Executive Officer Philippe Varin said in the statement. The carmaker still aims to generate a positive first-half operating profit excluding one-time items, he said.
Peugeot fell as much as 95 cents, or 4.3 percent, to 21.36 euros and traded at 21.80 euros at 9:21 a.m. on the Paris exchange, giving the carmaker a market value of 5.1 billion euros.
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