Porsche's average profit per vechile = $28,000
01-29-2007, 07:52 AM
#48
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Today's Wall Street Journal
Holding in VW Drives
Porsche Profit Higher
A WALL STREET JOURNAL NEWS ROUNDUP
January 29, 2007; Page A4
Porsche AG said fiscal first-half net profit rocketed to €1.05 billion ($1.36 billion), thanks to a substantial gain on the revaluation of its stake in Volkswagen AG and stock-price hedging.
The German car maker's overall sales fell, in part because it ended production of the first generation Cayenne sport-utility vehicle in November, and the next generation won't be introduced for another month or so.
Porsche, which also makes the iconic 911 sports car, said it "feels more optimistic" for the year as a whole and now expects to match the €2.1 billion profit it achieved in the previous fiscal year.
Net profit in the six months ended Jan. 31 was boosted by a better model mix, gains from stock-price hedging and a revaluation of the company's 27.4% stake in Volkswagen, Porsche said. The revaluation of the Volkswagen stake, which Porsche said was necessary to reflect the increase in its stake in Europe's biggest car maker, contributed €520 million to the bottom line.
Porsche didn't specify the size of the gain on its stock-price hedging but said it contributed a gain in the three-digit million-euro range. Max Warburton, an analyst at UBS AG, said this hedging profit could have been as much as €600 million on a pretax basis. Porsche has been snapping up call options -- effectively speculating that Volkswagen's share price will rise -- then reaping profits from the options as it purchases stock and drives the price higher, Mr. Warburton said. The value of Volkswagen's shares has risen about 60% since the start of Porsche's fiscal year in August.
Wolfgang Porsche to Take Post
Porsche also said Wolfgang Porsche, 63 years old, would succeed Helmut Sihler, 73, as supervisory board chairman, effective immediately. Mr. Porsche has been a member of the company's supervisory board since 1978. The Porsche and Piëch families control all of the company's voting rights. Ferdinand Piëch is chairman of the Volkswagen supervisory board.
Shares of Porsche were largely unmoved Friday, as analysts cautioned that the company's first-half results were heavily influenced by one-time effects, and after sales came in slightly weaker than a year earlier. Porsche shares fell €18.41, or 1.8%, to €991.59 Friday in trading on the Xetra exchange in Frankfurt.
"We understand the core business grew profits by only about 10%," Mr. Warburton wrote in a note to clients. "Option profits are unlikely to be a normal, ongoing source of earnings. Volkswagen's earnings -- not core Porsche -- should be the key driver in the next 12 months," he added.
Revenue in the first half fell 2.9% to €3.02 billion from €3.11 billion, with the number of cars sold falling 5.9% to 39,750. Porsche said the sales drop was caused by the planned introduction of its latest Cayenne model as well as a drop in North American sales, which declined 19% to 14,570 units. "The distribution of sales by regions shows how difficult the U.S. market has become," Porsche said.
With the second-generation Cayenne model not slated to be rolled out until February and March, sales of the SUV dropped 40% to 10,225 units.
German rival BMW AG reported a similar drop in sales of its SUV model, though its revenue hit a record level in 2006 as other models posted strong growth in sales. BMW posted revenue of €49 billion for 2006, up 5% from €46.66 billion a year earlier, amid stronger sales of its core BMW brand and its luxury Rolls-Royce cars. BMW said it sold 1.37 million cars in the year, a 3.5% improvement from 2005.
Other Growth Reported
Meanwhile, Porsche also reported growth across its other models, with 911 sales rising 16% to 17,340 units and sales of Boxster and Cayman cars increasing 22% to 12,170 units. For the full year, Porsche expects sales of the 911 model to reach 36,000 units, with 6,000 of those being its top-end turbo model.
"The model mix shows a clear preference in the market for high-priced models," Porsche said. It added that, assuming no surprises with Volkswagen, it was confident of matching the net profit of €2.1 billion it reported for fiscal 2006.
Separately, Porsche Chief Executive Wendelin Wiedeking said that plans by the European Commission to introduce mandatory carbon-dioxide-emission limits for automobiles are an attack on the German car industry.
"This is a business war in Europe. ... We will fight," Mr. Wiedeking said. "It's the Italians and French [car companies] against the German manufacturers," he added. "It can't be that the German car industry is being attacked within Europe," Mr. Wiedeking said. "I hope the [German] government knows what to do."
On average, cars made by German premium-auto makers such as Porsche and BMW feature more powerful engines with higher carbon-dioxide emissions than models from their European peers. France's Renault SA and Italy's Fiat SpA focus more on smaller or compact cars.
Mr. Wiedeking said he doesn't oppose carbon-dioxide-emission curbs in general, but wants individual limits for different types of cars such as small cars, midsize cars and SUVs.
Porsche Profit Higher
A WALL STREET JOURNAL NEWS ROUNDUP
January 29, 2007; Page A4
Porsche AG said fiscal first-half net profit rocketed to €1.05 billion ($1.36 billion), thanks to a substantial gain on the revaluation of its stake in Volkswagen AG and stock-price hedging.
The German car maker's overall sales fell, in part because it ended production of the first generation Cayenne sport-utility vehicle in November, and the next generation won't be introduced for another month or so.
Porsche, which also makes the iconic 911 sports car, said it "feels more optimistic" for the year as a whole and now expects to match the €2.1 billion profit it achieved in the previous fiscal year.
Net profit in the six months ended Jan. 31 was boosted by a better model mix, gains from stock-price hedging and a revaluation of the company's 27.4% stake in Volkswagen, Porsche said. The revaluation of the Volkswagen stake, which Porsche said was necessary to reflect the increase in its stake in Europe's biggest car maker, contributed €520 million to the bottom line.
Porsche didn't specify the size of the gain on its stock-price hedging but said it contributed a gain in the three-digit million-euro range. Max Warburton, an analyst at UBS AG, said this hedging profit could have been as much as €600 million on a pretax basis. Porsche has been snapping up call options -- effectively speculating that Volkswagen's share price will rise -- then reaping profits from the options as it purchases stock and drives the price higher, Mr. Warburton said. The value of Volkswagen's shares has risen about 60% since the start of Porsche's fiscal year in August.
Wolfgang Porsche to Take Post
Porsche also said Wolfgang Porsche, 63 years old, would succeed Helmut Sihler, 73, as supervisory board chairman, effective immediately. Mr. Porsche has been a member of the company's supervisory board since 1978. The Porsche and Piëch families control all of the company's voting rights. Ferdinand Piëch is chairman of the Volkswagen supervisory board.
Shares of Porsche were largely unmoved Friday, as analysts cautioned that the company's first-half results were heavily influenced by one-time effects, and after sales came in slightly weaker than a year earlier. Porsche shares fell €18.41, or 1.8%, to €991.59 Friday in trading on the Xetra exchange in Frankfurt.
"We understand the core business grew profits by only about 10%," Mr. Warburton wrote in a note to clients. "Option profits are unlikely to be a normal, ongoing source of earnings. Volkswagen's earnings -- not core Porsche -- should be the key driver in the next 12 months," he added.
Revenue in the first half fell 2.9% to €3.02 billion from €3.11 billion, with the number of cars sold falling 5.9% to 39,750. Porsche said the sales drop was caused by the planned introduction of its latest Cayenne model as well as a drop in North American sales, which declined 19% to 14,570 units. "The distribution of sales by regions shows how difficult the U.S. market has become," Porsche said.
With the second-generation Cayenne model not slated to be rolled out until February and March, sales of the SUV dropped 40% to 10,225 units.
German rival BMW AG reported a similar drop in sales of its SUV model, though its revenue hit a record level in 2006 as other models posted strong growth in sales. BMW posted revenue of €49 billion for 2006, up 5% from €46.66 billion a year earlier, amid stronger sales of its core BMW brand and its luxury Rolls-Royce cars. BMW said it sold 1.37 million cars in the year, a 3.5% improvement from 2005.
Other Growth Reported
Meanwhile, Porsche also reported growth across its other models, with 911 sales rising 16% to 17,340 units and sales of Boxster and Cayman cars increasing 22% to 12,170 units. For the full year, Porsche expects sales of the 911 model to reach 36,000 units, with 6,000 of those being its top-end turbo model.
"The model mix shows a clear preference in the market for high-priced models," Porsche said. It added that, assuming no surprises with Volkswagen, it was confident of matching the net profit of €2.1 billion it reported for fiscal 2006.
Separately, Porsche Chief Executive Wendelin Wiedeking said that plans by the European Commission to introduce mandatory carbon-dioxide-emission limits for automobiles are an attack on the German car industry.
"This is a business war in Europe. ... We will fight," Mr. Wiedeking said. "It's the Italians and French [car companies] against the German manufacturers," he added. "It can't be that the German car industry is being attacked within Europe," Mr. Wiedeking said. "I hope the [German] government knows what to do."
On average, cars made by German premium-auto makers such as Porsche and BMW feature more powerful engines with higher carbon-dioxide emissions than models from their European peers. France's Renault SA and Italy's Fiat SpA focus more on smaller or compact cars.
Mr. Wiedeking said he doesn't oppose carbon-dioxide-emission curbs in general, but wants individual limits for different types of cars such as small cars, midsize cars and SUVs.
01-29-2007, 12:52 PM
#49
Originally Posted by ljm301
Holding in VW Drives
Porsche Profit Higher
A WALL STREET JOURNAL NEWS ROUNDUP
January 29, 2007; Page A4
a drop in North American sales, which declined 19% to 14,570 units. "The distribution of sales by regions shows how difficult the U.S. market has become," Porsche said.
Porsche Profit Higher
A WALL STREET JOURNAL NEWS ROUNDUP
January 29, 2007; Page A4
a drop in North American sales, which declined 19% to 14,570 units. "The distribution of sales by regions shows how difficult the U.S. market has become," Porsche said.
The rest is all about highly manipulatable financial stuff (e.g. stock hedging and revaluation of stake in VW).
01-29-2007, 01:47 PM
#50
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You people are all nuts (but so am I - look at the avatar). It may be comparing "apples to oranges", but the company in medical devices that I used to run (one of the largest in the world) had a margin of 80% on its products. Hoffman-LaRoche pharmaceuticals has an average margin of 90% on pills, much more in the U.S., and less in Europe. We have all been financially successful in some fashion, but are "bashing' a financially successful company.
Just IMHO...
Just IMHO...
