PSA Peugeot Citroen’s first quarter revenue surpassed analysts’ predictions due to growth in Latin America and China, offsetting the decline in Europe.
Although Peugeot’s revenue dropped 6.5% compared with last year, it was still higher than analysts’ estimations of 12.7 billion euro. Deliveries also fell 2.5% to 674,200 units. The French automaker expects the European market, which heads towards its sixth consecutive year of declines, to drop 5% in 2013. Sales during Q1 increased 25% in Latin America and 31% in China. Peugeot promised to reduce cash consumption to 100 million euro this year and reach the break-even level by the end of next year.
“We continue to remain skeptical about PSA achieving this, but confirmation should provide some comfort,” Philip Watkins, a London-based analyst at Citigroup Inc., said today in a report to investors.
According to ACEA, Peugeot’s sales in Europe during the first quarter fell 15% and its market share shrank from 12.9% last year to 12.3%. The automaker’s restructuring plan in the region includes cutting 11,200 jobs in France, closing the Aulnay plant and manufacturing parts and new vehicle model in partnership with GM.
“These measures include the start of negotiations with French unions about competitiveness, and the possibility of adapting capital expenditures,” said Peugeot CFO Jean-Baptiste de Chatillon.