French carmaker Renault posted a forecast-beating rise in 2003 profits on Tuesday thanks to its stake in Japan's Nissan and the success of its revamped Megane range, and predicted more growth ahead.
Shares rose in Europe's fourth-biggest carmaker after it said net profit jumped 27 percent to 2.48 billion euros ($3.2 billion) and operating profit fell a smaller-than-expected 5.5 percent to 1.40 billion euros, due to a strong euro and weaker sales in western Europe.
"These numbers are higher than expected," said Morgan Stanley analyst Adam Jonas, who rates the stock equal-weight. "But it's the outlook that is interesting - raising a margin target that much when competition is tough and pricing difficult is surprising."
For 2004, Renault said strong sales of its love-it-or-hate-it Megane range as well as improved profitability outside western Europe and tighter co-operation with partner Nissan would further boost net profit and lift its operating margin to 4.5 percent from 3.7 percent in 2003. This assumes no major exchange rate shifts.
Renault has been cutting costs to boost profitability and has banked on the mid-sized Megane and Scenic spin-off to revive its fortunes after several years of fading profits as rivals churned out hit models and left its line-up looking dowdy.
The company also hiked its dividend to 1.40 euros per share from 1.15 euros, which helped lift its shares 1.5 percent to 53.80 euros by 1316 GMT, compared with a 0.2 percent decline in the DJ Stoxx European auto index.
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