Alongside an upbeat quarterly earnings report, Ferrari (NYSE:RACE) gave a strong outlook for the year.
Earnings release
Italian luxury automaker Ferrari delivered its earnings results with a 38% gain in fourth-quarter adjusted core earnings and announced a strong guidance for 2017.
Ferrari, which was spun off from Fiat Chrysler Automobiles last January 2016, said in a statement previously on Thursday that adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in October-December climbed to €251 million.
Sales increased 12% to €836 million, hovering above expectations of €815 million euros.
This number was lifted by sales of its 12-cylinder models such as the GTC4Lusso and LaFerrari Aperta, one of its newest launches.
For its outlook in 2017, Ferrari estimated an adjusted EBITDA of over €950 million, sales climbing above €3.3 billion and net debt getting axed from €653 million, the amount at the end of 2016, to €500 million.
Analysts gave a forecast just below Ferrari’s, with adjusted EBITDA at €921 million and sales of €3.29 billion.
Analyst at Evercore ISI, George Galliers, said that:
Investors will assume that Ferrari will have left some upside to their 2017 guidance and attempt to follow a similar pattern to 2016 of 'Beat and Raise’.
FERRARI Stock
The luxury carmaker’s stock soared to a new peak on Thursday following its earnings release. Ferrari’s Milan-listed shares earlier yesterday jumped over 4% to €60.75, the highest left since their debut last year January. Shares in New York, meanwhile, added 4% to finish the session at $64.61. Its earnings results on Thursday proved to have the stock move sharply as seen on the chart. The Ferrari stock is currently in volatile trading, up by 3.97% or $2.47 in the last session and continued climbing by 0.88% in afterhours to $65.22.
Ferrari has been under pressure to prove it can boost profits without the support of a large parent—namely, Fiat Chrysler— and pick up sales without compromising the brand's high-class status.
2017 and 2019 Plans
The Italian carmaker will be celebrating its 70th anniversary this year with a chain of tailor-made cars, all inspired by iconic models coming from its history. Generally, Ferrari intends to ship an estimated amount of 8,400 vehicles this year, a step closer to its target of 9,000 it has set for 2019.
Beyond exclusive models, Ferrari has been attempting to expand its appeal with vehicles that have characteristics besides the technical prowess of its 8-cylinder and 12-cylinder models. It labels the GTC4Lusso T, a four-seater with a smaller V8 turbo engine, as a car “designed to be driven every day.”
At the time of the stock offering, Ferrari CEO Chief Executive Sergio Marchionne vowed to develop the luxury brand beyond cars. He recently stated that the company’s focus would be on vehicles first.
Additionally, Marchionne said that beginning 2019, all vehicles sold would possess some hybrid elements, possibly paving the way for shipments to grow significantly in the future. At the moment, Ferrari is exempted from specific fuel economy and emissions requirements as long as it sells fewer than 10,000 vehicles a year.