Porsche Profits are Way Up and Should Stay in the Black despite Strong Euro

All those who questioned Porsches decision to go into the sport utility business when it initially announced the scheme are strangely silent today, except for the odd muttering about the brand now selling more SUVs than sports cars.

Those on Porsches board are hardly worried about that fact, however, as the automaker has never been so profitable with revenues as of Wednesday showing a 4 percent gain to $2.66 billion USD. Sales were up by a substantial 7 percent during the last

Porsche has never been so profitable, with revenues as of Wednesday showing a 4 percent gain to $2.66 billion USD. (Photo: Shawn Pisio, American Auto Press)

But while the Cayenne may have been the Porsche sales leader, the all-new 911 spurred on sales in November to the tune of 8,452 examples, a rise of

The all-new 911 spurred Porsches sales in November to the tune of 8,452 units. (Photo: Porsche Cars North America)

Sales of the Boxster are down by 46.7 percent with only 1,916 buyers taking the bait, although for good reason. A completely redesigned Boxster will roll out in early 2005, which no doubt will reverse these numbers.

The new Boxster, 911 and ever-popular Cayenne should mean 2005 will be another banner year for the independent automaker.

"You can assume that we will secure our very strong

News from the Wednesday meeting forced Porsche shares up more than 3 percent to $661.85 USD. (Photo: Trevor Hofmann, American Auto Press)

How did it do last year? Porsche posted an 8.3 percent increase in net profit to 810 million USD on sales of 8.4 billion USD, plus the brands cash flow rose nearly 20 percent to $2.12 billion in its 2003/2004 fiscal year. Such news should keep shareholders happy, who experienced a 10 percent increase in earnings to $51.46 (adjusted via German DVFA method). Whats more, news from the Wednesday meeting forced Porsche shares up more than 3 percent to $661.85 USD.

According to Porsches chief financial officer Holger Haerter, the company is prepared to deal with a long term weakness in the American dollar, without a major impact to sticker price. (Photo: Trevor Hofmann, American Auto Press)

But how could a continuing low U.S. dollar and strong Euro scenario affect Porsches long-term sales? After all, with 40 percent of the nameplates sales taking place in the U.S., the price of one of Stuttgarts supercars could rise significantly.

Not so, according to chief financial officer Holger Haerter. Porsche will continue hedging strategies on financial markets designed to protect it against currency swings he added during the meeting. Porsche can defend its profit margins "even in case of a long-term dollar weakness," he stated.

So what to do with all that money? Ask any accountant, spend it. Thats exactly what Porsche has been doing, and on a highly anticipated fourth

"Not only do we have new model variants in the pipeline, but also new models," stated Porsche AG CEO Wendelin Wiedeking. (Photo: Trevor Hofmann, American Auto Press)

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