Berlin — Porsche warned that lower sales, high costs and trade concerns would hurt 2025 earnings, even before a possible hike in US tariffs on EU imports, making it the biggest percentage decliner on Europe’s benchmark stock index on Wednesday morning.
The German luxury carmaker had warned last month that profits would take a hit because of €800m spending on new internal combustion engine and hybrid models.
Like its parent, Volkswagen, Porsche is in the midst of a cost-cutting drive, shrinking its workforce by nearly 4,000 jobs and planning further cuts.
Sales dropped 3% last year and it expects even lower sales this year, with the depreciation of recent investments squeezing its margins to just 10%-12%. It also pared back its midterm margin target to 15%-17%, from 17%-19%.
Shares sank 4% in morning trading, the biggest decliner in percentage terms on Germany’s DAX index and at their lowest point since listing in September 2022, as analysts doubted Porche would be able to offset the decline in sales volume with higher pricing.
Its margin forecast, based on expected sales revenue that is roughly equal to 2024 at between €39bn and €40bn, does not factor in new tariffs that US President Donald Trump may impose on European car imports, which threatens to undermine Porsche’s sales in its biggest single-country market.
The carmaker is assessing passing on such tariffs, which could be as high as 25%, to consumers, but hopes a “sensible” tariff regime will prevail, CFO Jochen Breckner said.
Porsche has fallen from grace since its stock market debut, struggling in particular in China, where sales dropped 28% in 2024. Its operating profit fell 22.6% last year to €5.6bn, yielding a return on sales of 14.1% despite revenue remaining roughly on the previous year’s level, as renewing five out of six of its model lines weighed on earnings.
The company will keep its dividend for 2024 at the previous year’s level despite a 30.4% drop in net profit, according to Reuters calculations.
With demand for electric vehicles lagging, it promised to offer a range of combustion engine, hybrid or electric models “well into the 2030s”.
Reuters
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