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Adjusted operating income down 40%

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Company has plan for 20 new models this year

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CFO says to take 'decisive actions' on operations

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To reduce North America output, prices

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(Adds detail from CFO call, context)

MILAN, July 25 (Reuters) - Stellantis ( STLA ) pledged on

Thursday to take steps to address problems in North American and

elsewhere, including cutting output and prices, after the

world's No. 4 carmaker delivered worse-than-expected first-half

results.

Stellantis ( STLA ) has a total 20 new models planned for this year

and their development has required resources in recent months,

investment the company hopes will deliver profitability later

this year.

"The company's performance in the first half of 2024

fell short of our expectations," CEO Carlos Tavares said in a

statement.

Adjusted operating income (EBIT) fell 40% to 8.463 billion

euros ($9.17 billion) in half year to June 30.

That was below the 8.85 billion euros expected by analysts,

a Reuters poll showed.

Its Milan-listed shares were down 10% in early trading,

hitting their lowest level since August 2023.

Its margin on adjusted EBIT shrunk to just below 10%,

slipping below the double digit margin it aims to achieve for

the full year.

Stellantis' ( STLA ) free cash flow was negative at almost 400

million euros in the first half.

"We are working hard to meet our full-year (adjusted

operating income) margin forecast and to deliver positive cash

flows in the second half," CFO Natalie Knight told a media

roundtable.

Stellantis ( STLA ) forecasts include positive industrial free cash

flow for the year.

Stellantis ( STLA ) said it was taking "decisive actions to address

operational challenges" and CFO Knight said that, looking at the

second half, the group was taking "the bulls by the horns".

She said measures include inventory reduction and logistics,

especially in North America, the group's profit powerhouse.

"(That) is the market that needs the most work and where we

are most concentrated when we look at the second half," Knight

said.

"There are operational issues we've had in North America

where I think we could have performed stronger".

The CFO added the group would reduce production in North

America this quarter, as well as prices.

"That's one of the things that is important for us, to

calibrate how the supply and demand meet," she said.

Analysts at Citi said in a note they expect Stellantis ( STLA )

problems to continue.

"We see no real improvement until and unless Stellantis ( STLA )

removes the overhang from inventories - which itself would put

pressure on full-year ...margins," they wrote.

Japan's Nissan Motor ( NSANF ) saw first-quarter profit

almost completely wiped out on Thursday and slashed its annual

outlook, as deep discounting in the United States shredded its

margins.

($1 = 0.9226 euros)