Ferrari shares fall on lackluster earnings, flat deliveries

Delivery gains in Europe and America failed to offset a 20% drop in greater China, where tariffs weighed on the profitability of Ferrari’s made-in-Italy supercars. Adjusted operating earnings were in line with estimates.

“We are surprised that some investors were expecting a bump and an increase,” said Tom Narayan, an analyst at RBC Capital Markets.

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Ferrari fell as much as 6.7% in Milan, its steepest intraday decline since May 2021, and trading was temporarily halted. The stock is still up around 40% over the past year.

Automakers are coming under pressure from a broader economic downturn that is starting to weigh on even resilient luxury consumers. Porsche AG last month warned of a slowdown in China, where buyers have suspended purchases as the real estate crisis undermines confidence.

To be sure, Ferrari’s earnings were in line with estimates, and the company confirmed its full-year guidance amid healthy demand for pricier models like the €2 million ($2.2 million) Daytona SP3 and more personalization.

Bloomberg Intelligence analyst Mike Dean said in a note that the results “could result in a touch of disappointment for those new to the stock.” Ferrari’s high visibility on sales meant an upgrade was “always unlikely.”

While Chief Executive Officer Benedetto Vigna has initiated a shift to battery power, Ferrari still relies on its profitable combustion engine vehicles to protect margins. Adjusted earnings before interest, taxes, depreciation and amortization rose 13% to €605 million in the period.

The competition to make the transition is intensifying. China’s BYD unveiled a high-performance EV priced around $233,000 in February.

Maranello-based Ferrari is building a factory to build hybrid and electric cars that will be ready next month, with the first fully electric model expected in late 2025.

Date of first publication: 08 May 2024, 06:40 AM IST