Ferrari Pushes Through Auto Challenges With Profit Beat

(Bloomberg) -- Ferrari NV served up more proof the Italian supercar maker can push through headwinds that have beset much of the auto industry, delivering a rise in first-quarter profit that beat the highest estimate.

The brand, selling sleek and powerful cars sought after by the megarich, has long sought a spot next to other luxury goods makers such as Hermes International or Prada Spa. On Tuesday, it delivered a 14 percent jump in adjusted earnings earnings before interest, taxes, depreciation and amortization.

Growth in deliveries from the entry-level Portofino model helped to offset the end of the sales of the $2.1 million LaFerrari Aperta. The shares rose the most in three months.

“Ferrari's first quarter results confirm it's sailing far away from current auto industry trends,” IG Markets Ltd. analyst Vincenzo Longo said. Ferrari “is reaffirming itself once again as luxury brand with a clear value added.”

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While Ferrari reported a jump in profits and steep rise in shipments, other carmakers have struggled with slowing economic growth and record spending on electric-vehicle technology. BMW AG on Tuesday reported a 42 percent slump in automaking profit faced with increasing competition in weakening markets and costly pressures to keep up with tightening emissions regulation.

Ferrari rose as much as 5.7 percent, the most since Jan. 31, and was up 4.3 percent at 123.50 euros at 14:14 p.m. in Milan trading. The shares have gained 42 percent since the start of the year.

The rise in profit shows CEO Louis Camilleri is getting traction on a target to generate 2 billion euros in adjusted Ebitda no later than 2022 for the brand with the prancing-horse logo. Camilleri is planning more profit-boosting limited-edition sports cars to reach this goal, and will unveil a record five new models in the coming months. This also includes the manufacturer's first industrialized hybrid car due at the end of this month, Camilleri said at the Geneva car show in March.

“Hybridization is the most important challenge Ferrari will have to face in the next period, a crossroads that could also include some risks,” Longo said.

Part of the boost to shipments stemmed from accelerated deliveries to China ahead of new emission regulations, Ferrari said. Shipments to Mainland China, Hong Kong and Taiwan rose 79 percent to 328 vehicles, while total deliveries stood at 2,610 cars.

To contact the reporter on this story: Daniele Lepido in Milan at dlepido1@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Elisabeth Behrmann, Tommaso Ebhardt

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