Renault posts revenue gain on stronger pricing
PARIS (Reuters) - Renault's third-quarter revenue rose 6.7 percent as price increases helped overcome weaker emerging market sales, the French carmaker said on Wednesday, upgrading its European auto market growth forecast for the full year.
Revenue rose to 8.53 billion euros (6.80 billion pounds) in July-September from 8 billion a year earlier, Renault said in a statement, even as deliveries declined slightly to 612,934 vehicles globally from 614,888.
The gains in Europe, powered by new model launches such as the Captur mini-sport utility vehicle, "offset declines in Renault group's main emerging markets", the company said.
Renault's low-cost cars and emerging market presence helped it ride out a six-year European auto slump that ended last year. But the company is now grappling with weakening currencies and demand in many of the same overseas markets.
Renault raised its European auto market growth forecast to 5 percent for 2014 from the previous 3-4 percent estimate, while warning that emerging markets would remain "adverse and volatile" for the rest of the year.
The carmaker reiterated its full-year sales and earnings targets including a gain in global registrations and operating profit, backed by positive operating cash flow at the core manufacturing division.
"This is a good result, and Renault is indeed on track to reach its full-year targets despite tough Russian and Latin American markets," Arndt Ellinghorst, a London-based ISI Group analyst, said in a note to investors.
"Renault has the strongest product momentum of any EU mass maker and the average age of its fleet is declining," he said.
Supported by new models, price increases accounted for a 1.1 percent gain in revenue, Renault said, countered by a 1.3 percent negative effect from falling emerging market currencies such as the Russian rouble, Brazilian real and Argentine peso.
Despite the almost-flat registrations, sales volumes made a positive contribution to revenue by comparison with the year earlier period, when independent dealers sold more vehicles from their existing stocks.
Renault shares closed 0.7 percent higher at 55.59 euros in Paris on Wednesday prior to publication of the quarterly sales statement, valuing the company at 16.44 billion euros.
(Reporting by Laurence Frost; editing by Emelia Sithole-Matarise and David Evans)
