Ferrari (NYSE:RACE) Profit Jumps 17% in Q-3

Ferrari (NYSE:RACE) Profit Jumps 17% in Q-3

Ferrari (NYSE:RACE) Profit Jumps 17% in Q-3

$RACE

Ferrari (NYSE:RACE) saw a 3.4% increase in vehicle shipments from the same frame in Y 2017 driven by a 27% increase in sales of V-12-powered Supercars.

  • The 4-seat GTC4Lusso drove much of the jump in 12-cylinder sales, helped by deliveries of the limited-run LaFerrari Aperta Supercar. The gain was partially offset by the phasing out of the F12 Berlinetta.
  • The waiting list for Ferrari’s newest 2-seat 12-cylinder model, the 812 Superfast, extends beyond Y 2018.
  • Sales of V-8-powered models fell slightly Y-Y due to the phase-out of the California T, offset mostly by good sales of the 488 and new GTC4Lusso T models.
  • Ferrari’s sales rose 5.1% in Europe, 5% in North and South America (combined), and 7.1% in the rest of the world.
  • Sales of cars and spare parts generated EUR 605-M in revenue in the Quarter, 72.4% of Ferrari’s total revenue.
  • Sales of engines generated EUR 88-M in revenue (10.5% of total). That was down 10% from the same frame in Y 2016 due to the end of a relationship with a F1 racing team and a decrease in deliveries to Maserati.
  • Sponsorship, commercial, and brand activities related to Ferrari’s racing team generated EUR 124-M in revenue, down slightly from last year. The Ferrari team’s revenue is down this season because its ranking in the Y 2016 championship results was lower than its ranking in Y 2015. That decline was largely offset in Q-3 by increased revenue from its sponsors.
  • Ferrari’s EUR 147-M in industrial free cash flow fell from a year ago on higher capital expenditures related to its new models.
  • Ferrari ended the Quarter with EUR 485-M in net industrial debt, down from EUR 653-M at the end of Y 2016, that due to strong free cash flow.

With 2 races remaining in the 2017 season, Ferrari’s F1 racing team is currently 2nd in the standings, behind MercedesAMG.

Notes: Ferrari earnings: The raw numbers

All financial numbers are in Euros. As of 2 November, 1 Euro = about US$1.16.

Metric Q-3 2017 Q-3 2016 Change
Revenue 836-M 783-M 7%
Shipments 2,046 1,978 3%
Earnings before interest and tax (EBIT) 202-M 172% 17%
EBIT margin 24.2% 21.9% 2.3%
Net income 141-M 113-M 24%
Industrial free cash flow 147-M 178-M (17%)
Net industrial debt 485-M 627-M (142-M)

Data source: Ferrari N.V. “Industrial” refers to cash flow and debt related to Ferrari’s core auto-manufacturing business, not its financial services unit. “Net industrial debt” is Ferrari’s total auto-related debt minus its cash.

Looking ahead

Ferrari raised its full-year guidance

 Ferrari increased its earnings guidance for the full year. It now expects to improve on its very good Y 2016 results as follows:
  • Shipments of about 8,400 vehicles. Unchanged from prior guidance; Y 2016 result: 8,014.
  • Net revenue of about EUR 3.4-B. Prior guidance: greater than EUR 3.3-B; Y 2016 result: EUR 2.85-B.
  • Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of about EUR 1-B. Prior guidance: greater than EUR 950-M; Y 2016 result: EUR 748-M
  • Net industrial debt to fall below EUR 500-M. Prior guidance: about EUR 500-M; as of the end of Y 2016: EUR 653-M.

Note: Ferrari expects its improved margin to boost its full-year profit gain.

Symbol Last Trade Date Change Open High Low Volume
NYSE:RACE 117.35 2 November 2017 -2.92 118.49 119.13 115.52 921,130
HeffX-LTN Analysis for RACE: Overall Short Intermediate Long
Neutral (0.20) Neutral (0.19) Neutral (0.23) Neutral (0.17)

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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