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Peugeot profits rev up
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September 8, 1999: 4:39 a.m. ET
Strong French market, recent model success fuel 60% earnings surge
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LONDON (CNNfn) - Peugeot Citroen reported a sharp rise in first-half earnings Wednesday as a turbo-charged French car market, new-model success and stringent cost-cutting enabled France's number-two carmaker to peel away from many of its sputtering European rivals.
Peugeot, which is also second in terms of total European car sales behind Germany's Volkswagen, said net income surged 60 percent to 543 million euros in the first six months of the year.
The results, which thrashed analyst expectations for earnings of around 400 million euros, were in part a reflection of the strong French car market. France's car sales shot up 11 percent in the first half of the year, outpacing an 8 percent gain in the European market.
The popular Peugeot 206 small car helped propel sales up 7.5 percent to 19.02 billion euros in the first six months. For the full year, the carmaker has set a target for its automobile division of 2.4 million vehicle sales for 1999, a 5.4 percent rise from last year.
The European automobile market should see further growth in the second half of this year, the company said: "An increase in production capacity during the first half will permit a stepping-up in the sales dynamic for (models such as) the Peugeot 206 and the Citroën Berlingo."
"In these conditions, the objectives announced at the beginning of March, both commercial and financial, will most likely be attained, if not surpassed."
Last week, archrival Renault (PRNO) posted a better-than-expected 6.3 percent jump in first-half net income to 720 million euros.
Other European carmakers - including some of the German giants and Italy's Fiat - have seen their bottom line dented by slumping sales in their home markets and softer demand in emerging markets.
Peugeot's overall operating margin leapt more than 25 percent to 856 million euros in the first six months, reflecting 4.5 percent of total sales. In the automobile division alone, the margin represented 3.5 percent of sales, or 567 million euros. 
--from staff and wire reports
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Peugeot
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