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New York Post
Porsche slips 5% after lowering profit outlook over alloy shortage
By Jonah Elkowitz,
22 hours ago
Porsche fell more than 5% Tuesday after luxury car maker slashed future sales and profit outlook, citing an unexpected aluminum alloy supply shortage.
Flooding at an unspecified European contractor has hurt supply of aluminum alloy, affecting production of all its models and possibly leading to shutdowns for one or more vehicle series, the German company said.
“It is becoming apparent that the impending supply shortage will lead to impairments in production. These are expected to last several weeks and may possibly lead to production shutdowns of one or more vehicle series,” Porsche said in a statement.
Oliver Blume, CEO of Porsche AG, addressing the press. AFP via Getty Images
Porsche has not been able to obtain sufficient aluminum alloy from another source. NurPhoto via Getty Images
Porsche AG now expects sales between $42 billion and $44 billion as a result of the flooding in the aluminum supplier’s production facility. It previously expected revenue between $44 billion and $45.5 billion.
Bernstein analysts said the flooding occurred at a Swiss supplier, and would lead to the production loss of at least 10,000-17,400 vehicles in the second half of 2024.
At the high end, that figure is equivalent to over 11% of Porsche’s first-half deliveries.
The company predicts a return on sales between 14% and 15% for the year, down from its previous expectation of 15% to 17%.
The alloy shortage also impacted the supply chains of other German premium carmakers, like BMW and Mercedes-Benz, but both were able to find alternative suppliers.
Porsche SE, the holding firm of the Porsche and Piech families that control Volkswagen, and holds a blocking minority in Porsche AG, confirmed its 2024 earnings forecast despite the alloy supplier’s warning.
Porsche projects a decline in production for the rest of 2024. Getty Images
The aluminum alloy shortage adds to other challenges for Porsche in recent months, including software issues, product delays, supply chain problems and a sales slump in China.
It’s sales decline in China drove down its global deliveries by 7% in the first half of the year.
Porsche is also struggling to sell its electric vehicle this year. It put its EV ambitions on the back-burner Monday, citing customer demand and developments in the sector.
The company reports first-half results on Wednesday.
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