High-power cars drive Ferrari earnings to top of guidance

MILAN: Italian luxury automaker Ferrari expects 2020 earnings at the top of its previous guidance range, helped by strong demand for powerful and highly profitable 12-cylinder sports cars such as the Monza.

The company, known for its prancing horse logo, said on Tuesday it now expected adjusted core earnings of around 1.125 billion euros ($1.32 billion) this year, compared with 1.075-1.125 billion euros previously - assuming trading conditions are not further dented by the COVID-19 pandemic.

Ferrari said shipments were recovering in line with a production plan set after a seven-week freeze of its operations during the first wave of COVID-19 earlier this year.

They were down 6.5% year on year in the third quarter, but shipments of 12-cylinder cars, including the Monza, rose 15.4% in the July-September period.

Ferrari's Milan-listed shares extended gains after the results were published. At 1335 GMT, they were up 4.2% at 163.65 euros.

Despite the coronavirus crisis, Ferrari is on track with a rapid roll-out of new sports cars aimed at sustaining growth in core earnings and its share price.

A further new model is expected by the end of the year after the company in September launched the Portofino M, a modified version of its top-selling gran tourer.

"Deliveries of the SF90 Stradale and the Ferrari Roma are on track to start in Q4 2020," Ferrari said in a statement, referring to models unveiled last year and now coming on stream.

In the third quarter, adjusted earnings before interest, tax, depreciation and amortization (EBITDA) rose 6.4% to 330 million euros, above an average forecast of 299 million euros from analysts polled by Reuters.

For the full year, the company now expects an adjusted EBITDA margin of around 32.5%, versus 31%-32.5% previously.

Morgan Stanley analysts said the more upbeat guidance had not been expected by investors, and forecast an "exceptionally strong" fourth quarter.

"This result - a beat on Q3 and raise of the full year guide - provides strong momentum through the end of the year and to enter 2021," they said in a report.

Third quarter adjusted EBITDA margins stood at 37.2%, up from 33.9% a year earlier.