Ferrari lowers guidance after Q2 profits nearly wiped out

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MILAN (AP) — Italian luxury sportscar maker Ferrari further lowered its full year earnings guidance on Monday after reporting second-quarter profits were nearly wiped out by temporary halts in production and delivery due to the coronavirus.

The automaker reported 9 million euros ($10.5 million) in net profit for the April-June period, covering much of Italy’s strict lockdown, a 95% drop from the same quarter of 2019.

Shipments were down by half, to 1,389 from 2,671 a year earlier, with Ferrari resuming full production on May 8. Revenues were down 42%, to 571 million euros.

Ferrari lowered its full-year guidance for revenues to above 3.4 billion euros, from a previous forecast of up to 3.6 billion euros. Adjusted earnings before interest and taxes are forecast to hit a top range of 700 million euros from a previous top range of 800 million euros.

The new guidance reflects the carmaker’s ability to recover production of about 500 units out of the 2,000 total lost during the shutdown. It also is a result of a softer model mix due to delays in the ramp up of the SF90 Stradale, and lower engine deliveries to Maserati. Ferrari said the order book remained strong.

Shipments in the quarter were down by 41% in Europe, 53% in the Americas and 91% in greater China.

CEO Louis Camilleri told analysts that Italy’s coronavirus lockdown “engulfed us at a critical moment” as the company looked to produce models presented last year. He cited in particular the SF90 Stradale, which has more than 2,000 new components.

“While we are confident that deliveries to our clients will begin early in the fourth quarter, the ramp up in production will inevitably be delayed,’’ Camilleri said.

Orders were up by double-digits, with models like the Ferrari Roma coupe attracting many first-time buyers despite the lack of ability to offer test drives. Cancellations were “actually lower than what we had feared may well have occurred given our experience during the financial crisis,” the CEO said.

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