By Dominic Chopping
Shares in Porsche AG sank Monday after the German luxury sports car maker said late last week that it would delay the rollout of electric-vehicles and slashed profitability guidance.
Shares fell 7.3% in early European trade, with the news also dragging shareholders Volkswagen and Porsche SE which fell 5.7% and 5.4%, respectively.
As the industry continues to grapple with weak demand for new electrified vehicles, Porsche AG said it would delay the launch of certain all-electric models and instead switch focus back to more combustion engine and plug-in hybrid cars.
The costs associated with this change of tack come on top of headwinds from U.S. import tariffs and a declining Chinese luxury market, hitting profitability forecasts, it said.
Porsche AG now expects a slightly positive return on sales this year of up to 2%, from 5% to 7% previously, while its automotive earnings before interest, tax, depreciation and amortization margin is seen at between 10.5% and 12.5%, having previously guided for between 14.5% and 16.5%.
The return on sales downgrade marks the company's fourth downward guidance revision this year.
The warning hit Porsche's majority shareholder Volkswagen, which expects operating profit to take a 5.1 billion-euro ($5.99 billion) hit this year from the revised plans.
Volkswagen, which owns more than 75% of Porsche, now expects a full-year operating return on sales of 2% to 3% from 4% to 5% previously, with net cash flow in the automotive division of around zero versus 1 billion to 3 billion euros previously.
"Both the market's and Volkswagen's frustration with Porsche AG's tortuous efforts to get to grips with its issues are palpable, and we see better opportunities outside these names," Bernstein analysts said in a note to clients.
Holding company Porsche SE--which has a direct equity investment of around 12.5% in Porsche AG--also cut its guidance on the lower-than-expected results from Porsche AG. It now forecasts an adjusted after tax profit of 900 million to 2.9 billion euros this year, down from previous guidance of 1.6 billion euros to 3.6 billion euros.
Porsche AG was removed from Germany's DAX index of the country's 40 largest companies Monday following a reshuffle announced earlier this month.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
September 22, 2025 04:11 ET (08:11 GMT)
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