Peugeot-Citroen First-Half Net Profit Rises 60%
French automaker Peugeot-Citroen said Wednesday first-half earnings rose 60% on rising demand , better pricing and the rollout of new models.
Europe's second-largest car maker after Volkswagen said it increased its share of the European market and expects "continued improvement" through 2007 led by demand for new models such as the Citroen C4 Picasso and the Peugeot 207 -- Europe's fastest selling car.
Peugeot-Citroen reported a first-half net profit of 492 million euros ($680.58 million), up from 306 million euros ($423.29 million) a year earlier. First-half revenue rose 5.9% to 30.82 billion ($42.63 billion).
Operating profit came in at 842 million euros ($1164.74 million), up from 691 million euros ($955.86 million) a year before. The operating margin was 2.7% compared with 2.4% in the first half of 2006.
The company did not break out separate second-quarter results.
The earnings beat analyst forecasts. A poll by Dow Jones Newswires had predicted net profit of 323.8 million euros ($447.91 million) on sales of 30.35 billion euros ($41.98 billion). Analysts also estimated an operating margin of 2.4%.
Peugeot-Citroen's fortunes have ebbed in recent years as a weak product lineup and fierce competition from Asian manufacturers have caused its share of the key European market to fall to just over 13%percent, from a record of 16 percent in 2002.
The company said Wednesday its share of the European market rose to 14.2% from 14% a year ago, with 1,274,500 registrations.
Operating income at its automobile division rose 76% to 400 million euros ($553.32 million), boosting operating margin -- a closely watched indicator of the company's financial health -- to 1.7% of sales from 0.8% a year ago.
New CEO Christian Streiff -- who joined the company last year after a brief 99-day stint at the helm of planemaker Airbus -- detailed a major turnaround plan in May.
The program, known as CAP 2010, aims to reduce the company's fixed costs by 30%, speeding up the development time for new models and improving operations not directly related to production. The company said the measures will have a "greater impact" in the second half.
As the year progresses, Peugeot-Citroen said sales in the second half will be "slightly up" on the year-earlier period thanks to the launch of new, higher-value models.
Peugeot-Citroen has announced plans this year to reduce its work force in France by 4,800 employees, offering incentives to avoid forced layoffs.