By Giulio Piovaccari
MILAN (Reuters) -Italy's Iveco beat fourth-quarter earnings estimates on Friday, helped by higher prices of its trucks, and said it would pay out almost 190 million euros ($205 million) in cash to shareholders, boosting its shares.
The group, which also makes vans, buses, engines and military vehicles, said adjusted earnings before interest and tax (EBIT) from its industrial activities rose 27% in October-December to 238 million euros ($256 million), beating analysts' forecast of 220 million euros in a company poll.
"Repositioning of net pricing in trucks was the major catalyst for the profitability uplift in 2023," CEO Gerrit Marx told analysts on a call, without saying how much prices had risen.
Marx also forecast a boost from higher prices this year, "although at a lower level if compared to full year 2023", as well as lower production costs.
The company's Milan-listed shares rose as much as 10% and were up 7.5% by 1235 GMT.
For its industrial activities, Iveco guided for an adjusted EBIT of 770-820 million euros this year, versus the 818 million euro achieved in 2023, and for a drop of around 5% in annual net revenue.
Although a cautious outlook, JP Morgan analysts said the forecast for 2024 operating income was ahead of market expectations.
"We expect our diversified set of businesses to counterbalance the challenging industry environment forecast for 2024, delivering EBIT and cash flow results on a comparable level as in 2023," Marx said.
PAYOUTS
Iveco proposed a 0.22 euro per share dividend, for a total of around 59 million euros, its first dividend after it spun-off from CNH Industrial in early 2022.
It also proposed a share buyback programme of up to 130 million euros, replacing the existing one that expires in October.
It will last 18 months and will be funded through the company's liquidity, Iveco said.
The group, the smallest among Europe's major truck and bus makers, will hold a capital markets day on March 14, focused on plans as a stand-alone company.
"We are building a plan as if there was no further partnership, collaboration, or sharing of investments," Marx said.
($1 = 0.9288 euros)