Iveco shares tumble as truckmaker unexpectedly burnt cash in Q2
Industrial cash flow negative 98 mln euros in Q2
Adj. industrial EBIT down 4% in Q2 to 264 mln euros
Margin on adj. industrial EBIT up 10 bps to 6.9%
Updates with stock reaction, adds details from earnings statement
TURIN, Italy, July 24 (Reuters) -Shares of Iveco Group IVG.MI fell as much as 11% on Wednesday after the Italian truck and bus maker unexpectedly reported it burnt cash in the second quarter, despite preserving its operating profitability level in the period.
The manufacturer, which also makes defence vehicles, said in a statement that its free cash flow from industrial activities was negative by 98 million euros ($106 million) in April-June, compared with a company-provided analyst consensus for a positive result of 38 million euros.
The cash absorption was primarily due to one-off costs linked to the launch of Iveco's new truck line-up scheduled later this year, the group said.
By 0750 GMT Iveco shares were down 10.5%, making it the worst performer among Italian blue chips.
The company said its second-quarter adjusted earnings before interest and tax (EBIT) from industrial activities fell around 4% to 264 million euros, due to lower volumes and adverse currency impact, which mostly weighed on its truck business.
The result still came slightly above the company-provided analyst consensus of 250 million euros.
The margin on industrial adjusted EBIT slightly rose to 6.9%, supported by pricing power.
"All our business units performed well, growing or maintaining their profitability," said Olof Persson, who took over as group's CEO on July 1, after former boss Gerrit Marx moved to the helm of Iveco's former parent company CNH CNH.N.
The company on Wednesday confirmed its full-year forecasts, it upgraded in March, when it unveiled its long term business plan.
($1 = 0.9221 euros)
Reporting by Giulio Piovaccari; Editing by Cristina Carlevaro, Christopher Cushing and Tomasz Janowski
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