Porsche Shares Fall After Guidance Cut on Supply Issues

By Adam Whittaker

Shares in Porsche AG fell after the company cut full-year guidance and warned of production shutdowns due to a shortage of aluminum alloys.

At 0740 GMT on Tuesday, shares were down 5% at EUR69.02, trading near their lows since the company became public in 2022 and taking the stock down about 38% over the past year.

Shares in Porsche SE, an investment company that is a major shareholder in the carmaker, traded 3.1% lower, while shares in Porsche AG majority shareholder Volkswagen fell 1.3%.

The German luxury carmaker said late Monday that a significant supply shortage of aluminum alloys--used in the body components of all Porsche vehicle series--was caused by flooding at a production facility of a European supplier.

Delays could last several weeks and the company didn't rule out production shutdowns of one or more vehicle series. The delays won't be fully compensated for in the remainder of the year, it added.

As a result, Porsche cut sales revenue guidance to between 39 billion and 40 billion euros ($42.48 billion-$43.57 billion) from EUR40 billion to EUR42 billion previously.

It expects return on sales of between 14% and 15%, against previous guidance of 15% and 17%, and an earnings before interest, taxes, depreciation and amortization margin for its automotive segment between 23% and 24%, down from between 24% and 26%.

Following discussions with the car manufacturer, Bernstein analysts estimate the supply issue to cause the loss of at least 10,000 units of production in the second half of the year.

However, a loss of up 17,400 units could be expected if the upper end of the potential revenue reduction occurs, based upon the EUR115,000 wholesale revenue per unit recorded in the first quarter, the analysts wrote in a note to clients.

Write to Adam Whittaker at adam.whittaker@wsj.com

(END) Dow Jones Newswires

July 23, 2024 04:06 ET (08:06 GMT)

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