Ferrari’s stock jumps 10% after Q4 earnings top expectations

Ferrari NV’s (RACE) shares soared 10.2% in morning trade on Thursday after the company beat estimates on earnings for the fourth quarter of 2018. Revenues fell short of expectations.

Net revenues inched up 1% to EUR 845 million from last year. Total shipments for the quarter increased 19% to 2,398 units. Net profit improved 40% to EUR 191 million compared to the prior-year quarter. EPS, both on a reported and adjusted basis, grew 41% to EUR 1.00.

During the quarter, shipments grew across all regions with the highest growth of 31% in EMEA. Revenues grew year-over-year in Cars and spare parts as well as in Sponsorship, commercial and brand. Engines revenue dropped 30% on a constant currency basis while Other revenues fell 31%.

For full-year 2019, net revenues are expected to grow over 3% to more than EUR 3.5 billion. Adjusted EPS is expected to grow around 6% to between EUR 3.50 and EUR 3.70. Industrial free cash flow is expected to grow over 10% to EUR 0.45 billion.

In September, Ferrari outlined its long-term financial targets. These include plans to increase its dividend payout ratio to 30%, along with a share repurchase program of EUR 1.5 billion to be executed over the 2019-2022 period in relation to the growth of its industrial free cash flow.

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