Porsche cuts FY profit guidance for second time

(Sharecast News) - Luxury carmaker Porsche said on Wednesday it would kickstart a package of "comprehensive strategic realignment measures" after taking a big hit from US trade tariffs in the first half, as it cut annual guidance for the second time in three months.

The German manufacturer said that, due to it offering customers "price protection" from US import duties, first-half results included "an additional burden of �400m".

While the company held on to its sales forecast of �37bn-38bn for the year, the return on sales guidance range has been lowered to 5-7% from 6.5-8.5%, which had already been lowered in April from an earlier forecast of at least 10%.

The new targets factor in the recent 15% tariff deal struck between EU and US officials, as well as "potential countermeasures such as price adjustments [...] designed to mitigate the financial impact [of tariffs]", the company said.

In total in the first half, Porsche booked �1.1bn in special charges, relating to the well-flagged restructuring of its battery division, US tariffs and its "strategic realignment".

The carmaker, which in February announced nearly 2,000 job cuts over the next four years, said on Wednesday that it will "start negotiations with employee representatives on a second package of measures" in the second half of this year.

According to Jochen Breckner, head of finance and IT, the measures include "far-reaching approaches [...] expected to have a positive impact on earnings and cash flow in the coming years".

Sales revenues totalled �18.16bn in the first half, down 6.7% over last year, as deliveries fell 6.1% to 146,391. Operating profits sank 67% to �1.01bn, as the operating return on sales slumped to just 5.5% from 15.7%.

Porsche was trading 1.1% lower at �35.72 by 1553 CEST.