Ferrari stocks saw a sharp drop on Tuesday after the company released its Q3 earnings report. Despite an upward tick in Ferrari’s earnings for Q3, its decline in sales in China brought the company’s prospects down by a significant margin. The Italian business saw its core earrings go up by 7% in the third quarter, which should have encouraged investor confidence in the company, but it wasn’t sufficient when paired with Ferrari’s decline in shipments.
The U.S. listed share of the company closed at $441, which marked a significant 7.4% fall and has been noted as its largest daily decline in percentage since March 7, 2022. Ferrari shares fell as much as 6.1% in Milan. Still, overall, the company’s stocks are up by around 30% for 2024.
Ferrari Stock Drop Linked to Sales Slump in China
Ferrari NV’s shipments saw a 2% decline in the third quarter, which has been the main issue faced by the company. The Italian automaker faced a 29% decline in deliveries in China. Competition from the Chinese market has been a primary point of contention for EV makers, however, in this case, the concerns faced by the Chinese economy have resulted in a decline in demand for luxury products.
The automaker has remained confident in its sales estimates and share value but Ferrari’s stock drop signals that there could be some cause for worry. Unlike other car makers, Ferrari’s performance is often more strongly linked to luxury product sales as the company only sells a limited number of high-priced products on a yearly basis.
CEO Benedetto Vigna chimed in with Ferrari’s Q3 earnings report to explain that “a strong product mix” and the rising demand for personalized vehicles sets its products apart and will ensure that Ferrari continues to perform above expectations. Personalizations have been a big part of the company’s focus this year.
Ferrari also announced the F80 supercar recently, and it intends to start shipping the vehicle in the fourth quarter of 2025. The company aims to sell 799 cars for €3.6 million ($3.9 million) each, which could be a significant consideration in the company’s sales numbers in the upcoming year.
Despite Ferrari’s decline in shipments, it appears confident about hitting its full-year targets that were announced earlier in August.
Ferrari’s Earnings Report for Q3 Shows Solid Numbers
The auto manufacturers’ third-quarter adjusted diluted earnings went up by 12.5% from last year, standing at €2.02 ($2.20) per share, which beat analyst estimates of €1.99 ($2.17) a share. Adjusted earnings before interest, taxes, depreciation, and amortization rose 7.1% year-on-year to €638 million ($695 million).
Ferrari’s earnings report for Q3 detailed sales growth of 6.5% year over year to €1.64 billion, which was tied to the demand for car customizations, and beat analyst estimates of €1.63 billion. Additionally, revenue from the cars and spare parts rose 5.2% YoY, and sponsorships, commercial, and brand revenues increased by 20.4%.
Net debt at the end of Q3 was €246 million, which showed a pointed decline from €441 million in Q2. The decline in Ferrari’s shipments aside, the sales the company did make were tied to demand for the improved Daytona SP3 model and several 499P Modificata units.
With the €3.6 million F80 supercar on the horizon and its increased focus on pushing car personalizations, Ferrari remains optimistic about its full-year performance.
