Ferrari’s earnings trend
In the second quarter, Ferrari’s (RACE) adjusted EPS reached 0.84 euros (or $0.98), 17.0% higher than its adjusted EPS of 0.72 euros in the second quarter of 2017. The company beat Wall Street analysts’ EPS estimate of 0.80 euros.
During the second-quarter earnings event, Ferrari’s management also confirmed its solid 2018 outlook. Now, let’s look at analysts’ estimates for Ferrari’s third-quarter earnings and explore whether this positive trend in RACE’s earnings is expected to continue.
Analysts’ estimates for Q3 2018
Wall Street analysts expect the existing positive trend in Ferrari’s earnings to continue in the third quarter. According to analysts’ consensus estimates, Ferrari’s third-quarter EPS should reach ~0.99 euros (~$1.13). These estimates reflect a 33.4% increase from its adjusted EPS of 0.74 euros in the third quarter of 2017.
This positive growth expectation for Ferrari’s third-quarter earnings is also in line with the company’s guidance to deliver more than 9,000 cars in fiscal 2018.
Progress toward 2018 shipment guidance
In the second quarter, Ferrari shipped 2,463 car units to customers, up 6.0% from the 2,332 units shipped in the second quarter of 2017. The company shipped 2,128 units in the first quarter. In the last three years, Ferrari’s management has focused on increasing the company’s annual car shipments. Last year, the company guided to ship about 8,400 units and met this guidance by shipping 8,398 car units.
Traditionally, Ferrari has been known to intentionally limit its annual car production volume to maintain the exclusivity and scarcity of its vehicles. Despite the recent increase in Ferrari’s shipments, its annual sales volume is still just a fraction of other legacy auto companies (FXD), including General Motors (GM), Ford (F), and Fiat Chrysler (FCAU). This disparity is due to Ferrari’s sole focus on luxury cars. The company has a niche target market, unlike GM, Ford, and Fiat-Chrysler’s focus on mass-market vehicles.
Read on to the next part to read about analysts’ estimates for Ferrari’s revenues in the third quarter.