Investing.com -- Porsche (ETR:P911_p) (ETR:PSHG_p) slashed its full-year sales and profitability guidance on Tuesday, citing expected impacts from U.S. import tariffs and a shift in its battery production strategy.
The carmaker’s shares plunged over 5% in Frankfurt as of 08:25 GMT.
Porsche is particularly exposed to President Donald Trump’s new tariffs because it does not operate any factories in the U.S. The duties add to pressures already weighing on Porsche in China, where weak demand, rising local competition, and a broader slowdown in electric vehicle adoption are taking a toll.
The company said it expects the U.S. tariffs to impact its business in April and May but noted that a full-year estimate remains difficult given the current uncertainty.
The company now projects full-year sales between 37 billion and 38 billion euros ($42.26 billion–$43.41 billion), down from its earlier forecast of 39 billion to 40 billion euros.
It also lowered its expected return on sales to between 6.5% and 8.5%, compared to the previous target range of 10% to 12%. This is Porsche’s second profit warning since February.
Porsche said its revised outlook includes the anticipated tariff impact for April and May but does not account for any further potential effects. The company expects
So far, the German carmaker has not hiked prices on its U.S. cars following tariffs, but "this may change in the future," according to Morgan Stanley (NYSE:MS) analysts.
"Without higher margins or growth than premium peers, we still think Porsche’s valuation multiples are too high, keeping us Underweight," the analysts noted.
Separately, Porsche announced it would no longer pursue plans to expand battery production through its Cellforce Group unit, citing the slower-than-expected growth of the electric vehicle market. This decision will lead to special charges of between 800 million and 1.3 billion euros this year.
The company also said it had adjusted its supply management globally, with a particular focus on China, where it continues to face softening demand and heightened competition from domestic brands.
For the first quarter, Porsche reported a 41% drop in operating profit to 760 million euros. Its operating return on sales fell to 8.6% from 14.2% a year earlier, while revenue slipped 1.7% to 8.86 billion euros.
Analysts had anticipated an operating profit of 780.9 million euros on revenue of 8.84 billion euros, according to Visible Alpha consensus figures.