Porsche Sticks to Guidance as Turnaround Drive Begins to Pay Off — Update

By Dominic Chopping

Porsche AG confirmed its full-year guidance as the German luxury sports-car maker continued to reap early benefits from a strategic reset.

The company earlier this month laid out plans to become more exclusive as part of a broader push to increase profitability in the coming years that also includes continued cost cuts and streamlining throughout the company's organization.

Presenting the automaker's strategy to 2035 at an investor event three weeks ago, Chief Executive Officer Michael Leiters said Porsche would offer more higher-end vehicles and hike the price of these models by about 20%.

The move builds on earlier plans detailed by Leiters that include divesting noncore assets, investing in new gas-powered and hybrid models, focusing on profits over sales volume and reducing the number of model variants.

The sale of its stakes in hypercar joint venture Bugatti Rimac and electric-vehicle maker Rimac Group closed in the third quarter, resulting in a gain of 593 million euros ($662.6 million) that boosted its earnings in the period.

"We are implementing our strategic realignment consistently and at a rapid pace," Leiters said. "Our focus is on our core business, a competitive cost structure and a sustainable increase in our profitability."

Costs associated with the strategic realignment totaled around 500 million euros in the first nine months, down from 2.7 billion euros in the same period last year.

Western automakers are having to adjust their strategies as the key Chinese market continues to deteriorate, while tariffs have made exporting to the U.S. costly and domestic European manufacturing costs remain elevated.

Porsche deliveries fell 16% in the first nine months of the year, weighed by the tough Chinese market, though all sales regions experienced a drop.

"The market environment in China remains challenging," the company said Tuesday. "This is why Porsche continues to firmly pursue its 'Value over Volume' strategy there, prioritizing the brand's long-term development over short-term volume targets."

The company has moved to streamline departments and reshuffle leadership as it works through its efficiency drive that includes 9,000 job cuts and other measures to reduce production costs that it expects will lower its break-even point to below 200,000 cars. It delivered just under 280,000 cars in 2025.

Porsche reported operating profit of 1.74 billion euros in the first nine months of the year, up from 40 million euros last year, as revenue slipped 5.9% to 25.28 billion euros.

Despite lower volumes, Porsche said a larger proportion of high-margin models and positive pricing effects supported the business performance.

The operating margin rose to 6.9% in the first nine months from 0.2%, while the margin for automotive earnings before interest, tax, depreciation and amortization rose to 17.3% from 11.9%.

It still expects revenue this year at between 35 billion and 36 billion euros, an operating margin of 5.5% to 7.5% and an automotive Ebitda margin of 15% to 17%.

The automotive net cash flow margin is expected at between 5.5% and 7.5% this year.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

October 27, 2026 04:29 ET (08:29 GMT)