Bloomberg reports that Porsche AG shares declined by 4.5% this morning on warnings that the company faces high product development costs that will dent profits.
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The carmaker, widely admired as the industry’s most profitable, warned that development costs for the new Panamera car and a hybrid engine for the Cayenne sport-utility will be a burden for profit.
“It is clear that starting in this year of business we will be incurring enormous development expenditure on the Panamera project and the hybrid drive in the Cayenne,” Chief Executive Officer Wendelin Wiedeking said at a press conference today in Stuttgart, according to Bloomberg.
Inflation, higher oil prices and ‘not exactly thrilling’ economic growth are additional burdens on growth, Wiedeking added.
The shares fell as much as 29.26 euros, or 4.5%, to EUR 625.74 and were down 3.8% at 10:55 a.m. in Frankfurt, Bloomberg said. The stock, which fell 12% on September 26 following the announcement to purchase the Volkswagen stake, has gained 34% so far this year.
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By GlobalDataPorsche expects vehicle sales and revenue to grow in the current year after the company introduced new versions of the Boxster and 911 models last year as well as an its Boxster-derived Cayman this year. Four-month revenue rose 6.7% to EUR2.02 billion, while vehicle sales increased 8.5% to 25,635 units.
