Automaker Stellantis (STLA.US) reported third-quarter revenue of €37.2 billion, marking a 13% year-over-year increase—its first revenue growth in seven quarters. The results suggest early success under new CEO Antonio Filosa's restructuring efforts. However, the company also issued a cost warning, casting a shadow over an otherwise positive quarterly performance.

The Franco-Italian-American conglomerate estimated that U.S. tariff policies would impact 2025 earnings by approximately €1 billion ($1.2 billion), narrowing its prior forecast of €1 billion to €1.5 billion.

**Strategic Shift Toward U.S. Market** Stellantis' revenue growth was primarily driven by strong performance in North America, aligning with analyst expectations. Since taking over in June, Filosa has focused on reversing declining U.S. sales and reducing excess inventory at North American dealerships—a key factor in the ouster of former CEO Carlos Tavares late last year.

Earlier this month, Stellantis announced a $13 billion investment to boost U.S. production capacity in response to Trump-era tariffs. Filosa has also unveiled bold initiatives, including booking billions in pre-tax expenses in the first half, relaunching popular models like the Jeep Cherokee SUV, and refocusing on hybrid and combustion vehicles while continuing electrification efforts.

"Commercial progress remains positive," the company stated, adding that six of its ten planned 2025 vehicle launches have been completed. In contrast, weak demand in Europe has led to canceled investments and temporary factory closures.

**Reaffirmed Guidance and Cost Warning** Stellantis reiterated its second-half financial outlook, expecting revenue growth, improved cash flow, and adjusted operating margins in the low single digits. However, it warned of potential expenses tied to strategic adjustments, product planning changes, and warranty assessment revisions, which would "largely" deduct from operating profits once finalized.

The company attributed these costs to decisions addressing "regulatory, geopolitical, macroeconomic, and other external and internal developments" but declined to elaborate. It also cautioned that its projections assume no further supply chain disruptions or shortages.

Following the announcement, Stellantis shares fell over 5% in pre-market trading in the U.S. and dropped 2.8% in Milan, bringing its year-to-date decline to around 25%.

Citigroup analyst Harald Hendrikse noted, "Given the unclear scale of expenses and their impact on free cash flow, we expect the earnings call to focus heavily on this issue."