U.S. News

Porsche More Upbeat After Strong First Half


Germany's Porsche forecast it would be able to maintain profits this fiscal year after first-half pretax profit easily beat analyst expectations on Friday.

Earnings before taxes rose sharply to 1.45 billion euros ($1.9 billion) from 277.8 million a year before, while profit after tax reached 1.05 billion euros, according to preliminary figures for the six months to the end of January.

Analysts polled by Reuters had on average expected first-half pretax profit of 425 million euros.

Porsche cited enhancement of its model mix and a one-off gain from its 27.4% stake in Volkswagen for the first-half profit surge.

Hedging proceeds from the VW stake totaled hundreds of millions of euros, while revaluing the VW shares contributed 520 million euros more, it said.

"Assuming there are no surprises with VW or with the VW stock price, Porsche is confident to be able to achieve the previous year's result of 2.1 billion euros in the current year of business," the company said in a statement.

First-half revenues including divestment gains edged down 2.9% to 3.02 billion euros, while vehicle sales slipped 5.9% to 39,750 vehicles given a model changeover for the Cayenne offroader.

It said it intended to keep full-year unit sales steady.

At the Detroit car show early this month, Chief Executive Wendelin Wiedeking struck a slightly more optimistic tone than a month ago about pretax profits in the financial year ending July.

He cited good business so far this year and solid orders for the refreshed Cayenne.

At a news conference in December, Wiedeking had said Porsche would struggle to match the record 2.11 billion euros in pretax profit it made in 2005/06 year.