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    Porsche Sees 2004 Profit Little Changed; Shares Fall

    PAG, maker of the Cayenne! (oh and they make sports cars too).

    Porsche Sees 2004 Profit Little Changed; Shares Fall (Update4)
    Sept. 9 (Bloomberg) -- Porsche AG, the maker of the Cayenne sport-utility vehicle, said 2004 earnings may be little changed as sales of the Boxster and 911 sports cars fall and the euro rises against the dollar. The shares fell as much as 8.5 percent.

    The German carmaker will try to ``stay at a high level of profit,'' in fiscal 2004, Chief Financial Officer Holger Haerter said in an interview at the Frankfurt car show. The euro may rise to as much as $1.30 from its present value of $1.12, he said.

    Porsche's sales in the past fiscal year through July 31 rose 15 percent to 5.6 billion euros ($6.2 billion) from the year-ago period, the company said. Vehicle sales rose 23 percent to 66,803 units. Pretax profit rose ``clearly,'' Porsche said, without providing figures.

    Chief Executive Officer Wendelin Wiedeking is counting on the Cayenne to maintain growth as demand for sports cars falls. Stuttgart, Germany-based Porsche began selling the Cayenne at the end of last year. Sales of the company's two sports car models have fallen. The U.S. is Porsche's largest market.

    Shares of Porsche fell as much as 34.83 euros to 376.65 euros and were down 28.43 euros, or 6.9 percent, to 383.05 euros at 4:23 p.m. in Frankfurt. The stock is down 13 percent this year.

    The carmaker makes two versions of the Cayenne, both with 8- cylinder motors that it designed and manufactures itself. Porsche plans to start selling a 6-cylinder version of the Cayenne equipped with a motor from Volkswagen AG, its partner in the model. Volkswagen builds the Cayenne's basic body.

    Revamped Boxster

    Porsche revamped the Boxster model last year. The revision hasn't been enough to lure customers and the Boxster has lost sales to Bayerische Motoren Werke AG's Z4 model.

    Porsche said it needs to raise productivity between 5 percent and 10 percent annually to compensate for the higher euro. the euro could rise to $1.30, depending on the deficit spending in the U.S. and the long-term costs for the costs concerning the Iraq war, said Haerter. Within the next four to five weeks, Porsche expects the euro to trade within a range of $1.04 to $1.12.

    The company aims to utilize its opportunity to extend its hedging position beyond mid-2006. It's currently hedged against currency risks. While company has hedged its risk against currency fluctuations, a strong euro still can hurt profit, the chief financial officer said.

    The company has cut production of both the 911 and the Boxster to avoid having to offer incentives to sell cars. Wiedeking has said incentives hurt the company's image and the resale value of the cars.

    Last Updated: September 9, 2003 10:36 EDT

    Bloomberg Article

    Re: Porsche Sees 2004 Profit Little Changed; Shares Fall

    So perhaps with the lack of 911 sales, it may be easier to get a "deal". I wonder if PCNA wants dealers to move cars, at a reasonalbe price???

    Re: Porsche Sees 2004 Profit Little Changed; Shares Fall

    The press release said they would cut production instead of lower prices, no?

    Re: Porsche Sees 2004 Profit Little Changed; Shares Fall

    Quote:
    The press release said they would cut production instead of lower prices, no?



    I can only hope

    Re: Porsche Sees 2004 Profit Little Changed; Shares Fall

    Actually, if you're a USA-market buyer, there's a program on right now to "clear the iron off the lots" on any remaining MY 2003 bread-and-butter (no TT, GT2, GT3) Porsches.

    Perhaps there is hope yet?

    See your dealer for details.

    Re: Porsche Sees 2004 Profit Little Changed; Shares Fall

    Most dealers in the US with large inventories are selling all 2003 stock at incredible discounts. 10% off MSRP is quite easy to get, more if you have some negotiation skills. Obviously this will change with 2004 models as Porsche cuts these allocations.

    But then we have the 997 and 987 on the way, so... Get one or wait?

    Re: Porsche Sees 2004 Profit Little Changed; Shares Fall

    Quote:
    ...on any remaining MY 2003 bread-and-butter (no TT, GT2, GT3) Porsches.



    Bread-and-butter Porsches...I love that, Mike.

    Re: Porsche Sees 2004 Profit Little Changed; Shares Fall

    I think the saddest point to be inferred from this financial report is that if Porsche couldn't find a way to fund (even with sponsors' assistance) and launch a major factory racing effort in the top classes when profits were at record levels and extremely fat, then it's highly doubtful they'll fund a major racing effort when profits are flat and falling for the next several years.

    Re: Porsche Sees 2004 Profit Little Changed; Shares Fall

    Yes WW has already claimed that they will not return to racing in the near future. Let's hope that trend does not continue, but given the "flat" outlook, John is right...

    Of course, what do analysts know? Porsche may suprise us all next year. Let's hope.

     
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