Wednesday, November 18, 2009

PSA/Peugeot-Citroen raises its full-year outlook

Because of the improvement in the car market and the success of its models such as the C4 Picasso, PSA/Peugeot-Citroen has raised its full-year outlook. The company is revising its 2009 forecasts “significantly” upwards. In particular, PSA/Peugeot-Citroen now expects recurring operating income for the second half to be at breakeven while full-year free cash flow is anticipated to be positive.

Last July, the group had forecast cash flow to be negative in the second half and saw a full-year operating loss of 1 billion to 2 billion euros ($1.5 billion). PSA had a series of missed expectations the past few years and that had disappointed investors.

This led PSA to become reluctant in providing precise guidance for its results. Thomson Reuters I/B/E/S said that the average expectation for PSA’s full-year operating result is a loss of 1.146 billion euros after it posted a first-half loss of 1.33 billion.

The net loss is seen at 1.37 billion against a reported first-half figure of 962 million. Analyst Adam Jonas at Morgan Stanley observed that PSA had the “most conservative second half guidance of any European (carmaker) this year.”