Porsche profit soars with 911 sales driving returns

Porsche AG’s surging income failed to impress investors as concerns over headwinds in the final months of the year weighed on luxury-car maker’s shares.

Operating profit jumped 41% to €5.05 billion in the first nine months from the same period last year, partly due to exchange-rate effects, the luxury-car maker said. But the company didn’t raise its full-year guidance, suggesting the current quarter may be more challenging.

“In this volatile and difficult market environment we are demonstrating our ability to operate profitably, in particular through cost discipline and an attractive product mix,” Chief Financial Officer Lutz Meschke said in a statement.

The sports-car maker rose as much 2.9% to €84.90 after slipping to its offer price of €82.50 apiece, the top end of VW’s initial range for the shares that valued the company at €75 billion.

Carmakers have been bracing for runaway inflation and rising interest rates to weigh on sales, but demand has been relatively resilient so far, especially for premium vehicles. Mercedes-Benz AG this week said it expects strong shipments of top-end models to help shield it from a downturn, and Porsche reported surging 911 sales. Still, its parent Volkswagen AG missed profit expectations due to supply-chain problems, and Ford Motor Co. this week trimmed a forecast because of shortages and higher payments to suppliers.

“We will be faced with crises during the next decade, geopolitical crises, supply-chain issues,” Oliver Blume, the VW chief executive officer who also holds the Porsche top post, said in an interview with Bloomberg Television. “The best you can do is to have financial resilience and to prepare yourself to be flexible in the global regions.”

Porsche became Europe’s most valuable automaker earlier this month, when its market capitalisation overtook that of VW a week after the initial public offering in Frankfurt. Analysts have voiced concerns that Blume’s dual CEO role may worsen governance issues at both companies. VW cut its vehicle sales outlook for the year as chip availability remains scarce and logistics continue to pose a challenge.

“Given the tiny free float, any negative movement in the market will be exaggerated for Porsche,” said Michael Dean, an analyst at Bloomberg Intelligence.

Porsche returned to the stock market late last month in Europe’s largest listing in a decade. Blume said he sees the IPO as a blueprint to unlock more value from VW’s other brands.

“I want to build on the priorities I rolled out at Porsche and continue it across the group,” he said during a VW earnings call.

Porsche is well ahead of peers including Ferrari NV and Aston Martin Lagonda Global Holdings Plc when it comes to electrifying its lineup. The Taycan EV outsold the 911 last year and Porsche is preparing to introduce a battery-powered version of its Macan model, with first shipments expected in 2024.

—Bloomberg