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Ferrari is On Their Way to a Strong Year

Ferrari automobile factory

The luxury car maker Ferrari (NYSE:RACE) had a relatively good 3rd quarter to 2018 and is “on the way to another strong year,” per their recent press release.  The economy has been treating business very well over here in the States, resulting in some new-found wealth that ultimately must be spent.  American’s love luxury goods, and we account for a nice chunk of Ferrari’s sales.

Zacks Investment Research had consensus EPS estimates at $0.88 based on 3 reports, but Ferrari’s Q3 EPS came in at $0.90 for an upset of 2.27%.  Although this is some nice growth, last quarter consensus EPS were beat by over 10%.  Shares of RACE have decline about 1.9% today and are trading at $115.31 a share currently.

Nice size increase in shipping figures

Total shipments increased by 216 units, up 10.6% year over year thanks to strong deliveries for the 812 Superfast and Portofino.  Shipments to the Asia-Pacific region increased the most this quarter, up 27.5% year over year.  Additionally, shipments to other regions such as EMEA (Europe, Middle East, Africa), the Americas, and China-Hong Kong-Taiwan are up 11.3%, 4.6%, and 6.6% respectively.  The gist of the story here is that shipments in general are rising with positive contributions from all regions.

Not much revenue growth, but some sectors are strengthening

Ferrari’s revenue comes primarily from their car and spare part sales, but also has heavy contribution from stand-alone engine sales and their sponsorship/commercial sector.  Net revenues for this quarter were up just a little bit, about 0.3% year over year.  Compared to last year, revenues from engine sales are down a bit due to decreased demand from Maserati, who they supply engines to.  On the bright side, these revenues were compensated for by an increase in sales from cars and spare parts.  Additionally, their sponsorship, commercial, and brand sector has improved due to higher championship rankings and other brand related activities.

Ferrari confirms 2018 guidance

In their presentation, Ferrari confirmed their 2018 guidance that was announced on September 18th, 2018.  This year’s guidance lists shipments, including hypercars, at > 9,000 units.  Net revenues are supposed to come in at > €3.4 billion, while capital expenditures are supposed to come in around €650 million.  Adjusted EBITDA is anticipated to be greater than or equal to €1.1 billion while net industrial debt is supposed to come in less than €350 million.

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