Ferrari’s latest quarterly figures beat the Street, share price races out ahead
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Ferrari’s latest quarterly figures beat the Street, share price races out ahead

Luxury racing car icon Ferrari reported earnings at the beginning of the month demonstrating that, despite worries in the wider auto industry, there’s no shortage of demand for its immensely exclusive supercars. The company’s results were so strong that investors have pushed its share price up on expectations of an incoming guidance update. Driving these better than expected results were strong sales of new models, including the 8-cylinder Portofino model.

Ferrari’s share price has appreciated by 42% year to date

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Source: Yahoo Finance

Ferrari saw a 14% rise in core earnings against the year-ago quarter’s comparable figure. Adjusted earnings were 311 million euros, easily beating analysts’ expectations for 284 million euros. The company did equally well in regards to revenue, returning 940 million euros for the quarter. That’s a 13% rise year on year, and, once more, an easy beat against consensus estimates of 864 million euros. This brilliant performance was driven by success in all geographies – but China, a tiny region for the Italian supercar maker – was a stand out performer. Sales in the country rose by 79%.

The potential that China offers wasn’t lost on CEO Louis Camilleri, who said: “I think with the advent of our hybrid model and of the Purosangue (SUV), we will clearly be in a better position to exploit the opportunities that there are in China.”

Speaking to the remainder of the year, Camilleri was careful not to get carried away. He said: “We feel pretty confident we’ll approach the high end of our (guidance) range. But obviously, given the strength of this quarter, we feel pretty good about the year.”

Analysts have stated an increase to guidance might be on the cards. In a note to clients on the back of these results, Morgan Stanley analysts said the company’s current targets look “extremely conservative,” and Jefferies analysts described the first quarter results as “impressive” adding they “more-than” supported current consensus estimates for the year.

Disclosure

Dominion holds Ferrari in its Global Trends Luxury Fund.


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