Porsche Revenues High but Stock Value Low

Could Be a Good Time to Buy a Porsche, or Porsche Stock

Life just seems better behind the wheel of a Porsche, and as it seems around the executive boardroom. The German sports car and luxury SUV maker announced Tuesday that its revenues improved 18% to 3.89 billion euros (USD$4.52 billion) in the nine months that ended in April. Whats more the company has forecast a continuation to the trend despite a gloomy North American economy.

This marks the first time Porsche has published nine-month figures, spurred on by the increase in unit sales of 13% over the same time period due much to the recent success of its Cayenne sport utility vehicle. The brands sports cars, however, have been hit by the market uncertainty and fell 9%.

So why did Porsche, which previously stated quarterly earnings reports dont benefit shareholders and only promote short term business strategies, choose to break from tradition and issue one anyway? Its stock has been suffering since the beginning of 2003 despite its current profitability, as investors worry about slower sports car sales and the companys reliance on the weak U.S. market.

Still, according to a Reuters report, the worlds largest independent car company is on target for 65,000 units sold by the end of its fiscal year, July 31.

A statement by the company read, “Porsche also expects revenue and profit growth in 2002-03 compared to the previous year, with the company benefiting from its forward-looking currency hedging.”

Porsche obviously hopes the quarterly statement will bolster its troubled stock, bringing it more inline with its success in the auto market.