February 26, 2019 / 6:32 AM / 3 months ago

Carmaker PSA lifts profit outlook after record 2018 earnings

PARIS, Feb 26 (Reuters) - French carmaker PSA Group raised its medium-term profit guidance on Tuesday after reporting record full-year sales and earnings, buoyed by the success of its Peugeot 3008 and 5008 SUV models.

PSA’s recurring operating income jumped 43 percent to 5.69 billion euros ($6.46 billion), giving a 7.7 percent profit margin, helped by its acquisition of Opel-Vauxhall. Sales advanced 19 pct to 74.03 billion.

The financial performance “demonstrates the ability of our group to deliver a profitable and recurring growth”, said Chief Executive Carlos Tavares.

The Paris-based group said its 4.5 percent average margin goal for the 2019-2021 period would henceforth include the less profitable Opel-Vauxhall division, effectively raising the benchmark.

Strong sales of its latest Peugeot SUVs have helped PSA to build on its steady recovery from near-bankruptcy in 2013-14. Tavares is applying the same discipline at the Opel division acquired from General Motors in 2017.

The Peugeot-Citroen-DS (PCD) division, housing its legacy French brands, reported a record 8.4 percent operating margin as sales rose 18.9 percent despite adverse currency moves and higher raw-material costs. Opel-Vauxhall (OV) recorded a 4.7 percent margin on sales of 18.31 billion euros.

Analysts had expected group recurring operating income of 5.61 billion euros on revenue of 74.76 billion, based on the median of 10 estimates polled by Infront Data for Reuters.

$1 = 0.8805 euros Reporting by Laurence Frost; Editing by Sudip Kar-Gupta

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