Ferrari Punishes Early Investors With Earnings and Guidance

Ferrari N.V. (NYSE: RACE) was one of those interesting initial public offerings from 2015 that drew much attention from institutions and retail investors alike. The market turmoil and the bite from low oil hurting spending in many regions and nations have added a lot more uncertainty to the luxury sports car maker. The formal earnings report called 2015 its best ever results, but the reaction feels far short of a best ever report.

Now that Fiat Chrysler Automobiles N.V. (NYSE: FCAU) has completed the spin-off, Ferrari has to be evaluated as a standalone entity without the support of a larger parent company. Ferrari’s IPO price was $52.00 and shares briefly went as far as just over $60.00.

The company reported fourth-quarter 2015 results on Tuesday, with a drop in earnings, and the guidance seems muted for 2016 as well. Ferrari’s net profit was €55 million (almost $60 million) for the quarter, down about 44% from a year earlier. Its revenue was down about 1% to €744 million.

Investors should know that the formal numbers are only a slight adjustment from some preliminary figures. That being said, the guidance was for sales to rise less than 2% in 2016. Ferrari will also pay out a €0.46 per share dividend, taking its total payment for dividends to €87 million.

Ferrari’s 2016 guidance is for shipments to be about 7,900 units, including supercars. Its net revenues should be roughly €2.9 billion, with adjusted EBITDA of close to €770 million.

For 2015, total shipments were up 6% to 7,664 units, while revenue was up 3% to €2.854 billion. Net profit was up 9% to €290 million, with a 200 basis point increase margin taking its adjusted EBIT to €473 million. Greater China revenues contracted by 10% in the fourth quarter from a year earlier, but it showed a 7% upturn for the fourth quarter after it introduced its 488 GTB.

The EMEA units, which is Europe, Middle East and Africa, saw shipments rise 158 to 938 in the fourth quarter of 2015 and up a total of 77 to 3,351 for the full year. Shipments into the Americas region were listed as follows:

  • Fourth quarter: 671 units, versus 740 prior year, a drop of 69.
  • Full year: 2,640 units, versus 2,462 prior year, for gain of 178.

Ferrari shares were last seen down 13.4% at $34.60 on Tuesday. Shares also hit a new 52-week low, and that post-IPO range is now $35.67 to $60.97.