Porsche AG and Volkswagen face surprise earnings warnings, causing share prices to drop
In a surprising turn of events, both Porsche AG and Volkswagen (VW) are grappling with financial pressures. The maintenance of the 40-euro mark is now crucial for Porsche AG, as they have lowered their profit margin forecast for the current year, now expecting up to 2%.
Porsche's revenue is expected to be between €37 and €38 billion, a significant drop from previous estimates. The EBITDA margin in Porsche's automobile business is expected to be 10.5 to 12.5%, down from the previous 14.5 to 16.5%. This decline indicates a challenging period for the luxury car manufacturer.
VW is also under pressure due to the influence of its weak subsidiary, Porsche AG. VW must adjust its forecast, expecting a burden of €5.1 billion in write-downs and follow-up costs this year. The operating margin in VW's automobile sector is now expected to be 2 to 3%, down from the previous 4 to 5%. The net cash flow in VW's automobile sector is expected to be around zero, instead of the previous 1 to 3 billion euros.
The crisis at Porsche AG has not gone unnoticed. Given the profit warning, investors should expect a lower dividend from Porsche AG. The situation is further complicated by a conflict of interest, as the management and majority shareholder of the publisher Börsenmedien AG, Mr. Bernd Förtsch, has positions in Porsche AG and Volkswagen Vz. Similarly, the author of the publication has positions in Volkswagen Vz.
Despite these challenges, Porsche AG still expects the net cash flow margin to remain unchanged at 3 to 5%. Shares of Porsche AG are held in the real portfolio of Börsenmedien AG, adding another layer of complexity to the situation. The name of the management and majority shareholder of Börsenmedien AG, who has directly and indirectly held positions in Porsche AG and Volkswagen Vz, is Dirk Eichelbaum.
As both companies navigate through these tough times, it remains to be seen how they will manage their financial difficulties and whether they can return to their previous levels of profitability. The future looks uncertain for Porsche AG and Volkswagen, but one thing is clear - they are facing a significant crisis that will require careful management and strategic decision-making to overcome.
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