According to the Reuters news agency, Porsche said on Tuesday it would be happy if it achieved stable profits in its current business year after nine straight years of growth, sending its shares sharply lower.
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“There is an opportunity for an increase in profit but there are risks, so we are hesitant to forecast a further profit rise,” Porsche CFO Holger Haerter told Reuters.
“If we can keep profits at the level of 2002/2003 we will be very happy,” he said, but added that the company nonetheless expected higher revenues and unit sales in its current business year to the end of July 2004, Reuters added.
According to the report, Haerter also said Porsche, still the world’s most profitable car maker, was expecting to sell about 70,000 cars this year, 30,000 of them its new Cayenne SUV. The company previously had said it could sell as many as 75,000 vehicles, Reuters noted.
“The expectations for Porsche were too high. The market is always spoiled by Porsche, so the market is seizing on this profit warning,” Juergen Pieper, autos analyst at Metzler Bank in Frankfurt, told Reuters.
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The news agency noted that some industry watchers have questioned whether Porsche would be able to maintain its stellar earnings growth this year, with spending set to increase as it prepares updated 911 and Boxster models expected early in 2005, and with falling sports car volumes continuing to offset the success of the Cayenne.
Reuters said the company repeated that pre-tax profit had increased significantly in its 2002/03 business year, although Haerter declined to say whether he was comfortable with a market consensus forecast of about €940 million.
Porsche, which posted a pre-tax profit of €829 million euros in 2001/02, will publish full-year earnings in mid-November, Reuters said.
Reuters noted that launching the Cayenne as sports car sales slowed helped lift Porsche revenues 15% to 5.6 billion euros in the year to the end of July, with sales up 23% at 66,803 vehicles despite a 15% fall in sportscar sales.
But the news agency noted that, while Porsche says the launch of a lower-powered V6 Cayenne will boost revenues, some investors are concerned the lower-margin model may jeopardise Porsche’s exclusive brand image and face tough competition from BMW’s X5 SUV and Volkswagen’s own Touareg.
Although the Cayenne has been a success in the United States, which has a huge appetite for petrol-drinking off-roaders and traditionally accounts for about half of Porsche’s sales, Haerter told Reuters the state of the US economy was of some concern.
“We are a bit worried about the economic environment, more worried than most of the forecasts,” Haerter reportedly said, adding: “We do not think we will see a strong increase in the economic environment in the United States next year.”
