Post: Porsche cuts its outlook

Due to the flooding of an aluminum supplier’s production facilities, the company now expects its 2024 sales to be between 39 billion and 40 billion euros (about $43.56 billion). Before that, the company expected its revenue this year to be between 40 billion and 42 billion euros. Porsche said the supply shortage has affected the production of all Porsche ranges and may result in the suspension of one or more models. The automaker said it does not expect to be able to fully compensate for delays in vehicle production and deliveries in the second half of the year. Porsche also added that it now expects a return on sales of between 14 and 15 percent this year, down from its previous forecast of 15 to 17 percent. Porsche is facing weak demand in China, which led to a 7% drop in global deliveries in the first half of the year. Porsche this month reported a 33 per cent year-on-year drop in China sales in the first half of the year. Porsche sells nearly 20 per cent of its cars in China, and investor concerns about rising trade tensions between Europe and China have kept its shares under pressure. Earlier this month, a trader said Porsche would improve profit margins and cash conversion rates in the second quarter, the latest sign that its high-margin luxury cars offer some profit protection amid weak sales in China. Stifel, a U.S. financial services and banking holding company, also said Porsche should see a “significant improvement” in its operating margin in the second quarter compared to the first quarter. In addition, Porsche confirmed its full-year profit margin guidance of 15 to 17 percent on the conference call.