17% increase in V8 Sales in 2015

Ouch !! Stock now trading at 34.98 wow. Glad I didn't buy that one but, not to worry I have plenty of other losers.

 

its called McLaren... Ferrari needs to up its game big time

 

and furthermore anyone who is smart never buys an existing company on a P/E way above 20

 

Its not McLaren.

Its CHINA.

 

That doesn´t make much sense: they´re selling more V8s (McLaren competitors) and less V12s (McLaren hasn´t anything in that market).

Not very surprising anyway: they launched new V8 models this year and the V12s are already old news.

 

V12's are down primarily to the FF & F12 Being older products and TDF's are just now getting delivered.
True V12 picture will come by the end of 2016 when new FF's wil be available - just IMO

 

Best quote from today's conference call:

Yet with Ferrari, what's bad for shareholders may be good for Ferrari owners and buyers. Most importantly, Marchionne allayed any lingering fears among Ferrari purists that the company would build an SUV to pump up sales.

"You would have to shoot me first," he said.

 

Another SEC filling that credits the Cali-T for increased V8 sales.. and yet this board will continue to echo that it is a complete failure.

Interesting to see the highlight of the Cali-T and Speciale-A as the main reason for the increase in V8 sales.. I'd have to assume that means they produced more Spec-As than coupes in Q4. Interesting..

 

I would buy a Ferrari SUV in a heartbeat. We all would, but that's not happening.

 

Wonder how a V-8TT FF(M) would effect the numbers

 

I bought an FF.. closest thing.. I agree I would buy one in a heartbeat!

 

Ahahah take it! Spot on Richard.

Liebe Grüsse aus der Schweiz

 

Todays WSJ and Ferrari stock performance or lack thereof.
Interesting what Mr. Marchionne says about an SUV.

Ferrari NV on Tuesday reported a steep drop in fourth-quarter net profit and gave a muted outlook for 2016, underlining the difficult road ahead for the super sports car maker as it looks to go it alone.

Ferrari, which was spun off from Fiat Chrysler Automobiles NV last month, said it earned a net profit of €55 million ($59.7 million) in the final three months of 2015, a drop of about a third compared with the same period the previous year. Sales fell 1% to €744 million. The numbers are slight adjustments to preliminary figures Ferrari released last week.

Highlighting Ferrari’s challenges, the stock plunged as much as 14% on the New York Stock Exchange after the release of the results. With its independence, Ferrari is navigating through uncharted territory as it has been part of Fiat Chrysler and before that Fiat SpA for 30 years. Industry watchers have wondered whether Ferrari will be able to generate the funds needed to roll out new models. Now the limited growth forecasts may lead to questions about the company’s claim that its cars, which sell on average for about €250,000, are so high-end as to be recession proof.

Brokers attributed the large drop in the share price to disappointment regarding the modest growth forecasts for this year that include a 2.9% increase in adjusted gross operating profit to €770 million compared with an analyst consensus of about €800 million. Revenue is seen rising 1.6%.

Ferrari shares have lost about a third of their value since the company’s October initial share sale price of $52. They changed hands at $35.90 in midday trading in New York.

“I don’t understand the markets. We reported our best results ever,” said Ferrari Chairman Sergio Marchionne when asked on a conference call about the stock’s reaction.

Mr. Marchionne had been counting on strong growth in China to help fuel growth in the coming years, though he dialed back expectations, saying that North America and Europe will be the growth engines going forward. Vehicle sales in greater China fell 9.6% last year, though that was partially offset by a 26% rise in the rest of Asia.

Ferrari will pay a dividend of €0.46 a share on 2015 results for a total payout of €87 million. The company said it would pay out up to 40% of future net profit in dividends in coming years. Net debt at the end of last year was €1.9 billion compared with net cash of €566 million at the end of 2014.

Mr. Marchionne once again quashed any speculation Ferrari might someday sell a sport-utility vehicle or crossover, saying “you’d have to shoot me first.”

Write to Eric Sylvers at [email protected]

 

I am not going to weigh in what might be the true value of Ferrari shares or where the shares are headed. I will be honest enough to say I bought a nominal 100 shares of FCAU before the spin off so I could get some shares at the IPO price. I bought it ONLY for the fun of it and to get a stock certificate with the Ferrari logo.
Now, 6 months later this is where I am at:
(1) I could have bought the stock cheaper now.
(2) The certificate that I thought would cost me a nominal $40 is now $500. In other words, the paper costs more than the shares are worth!!
According to Schwab and Morgan Stanley who I deal with, they both said the transfer agent has upped their fees for certificates. It is not a Ferrari thing. Somebody told me certificates are N/A anyway, but I cannot confirm that.
Knowing Ferrari, I am sure you can get the certificate. But, the type of ink, paper, printing font, etc. are all extra comp. options!
Best

 

If their stock continues to struggle my prediction is you'll see a rapidly expanding portfolio
to satify Wall St growth expections.May even see 4 door Ferrari which SM has never denied

 

I do agree McLaren has put pressure on Ferrari, but the net effect appears to be negligible on new cars (458's and 488's), and probably a lot on the used market car pricing, which is felt at the dealer level.

Re China, while high visibility, the "China drop" on financial results for Ferrari is about 2% of total revenue. The challenge with China for them is that it was a major axis of growth, which is now stunted; it also represents where they have spent R&D and capital to create sub-4.0l TT engines and likely the target of an FF V8 version. The China "problem" is one that has yet to really impact them, but it's coming. (refer to Audi, BMW, MB sales impacts in China, vs. even Jeep)

This is the ying-and-yang they will struggle with.

They aspire to a luxury good enterprise valuation, so theoretically they need to maintain scarcity, and expand profits by driving up actual MSRP's (via personalization, options, tailor made) and monetizing each owner and car further (eg. FFS, Corso Pilota, Classiche, merchandise). Deep order books, a long wait, a bit of market hyped speculation on LaF's and a layer of high profit customizations are all ingredients for a sustainable luxury brand premium. They are well past proving themselves as a sustainable brand, now they have to maintain it.

However, they have the reality of being a (very well performing) auto/industrial company, with the underlying economics. The debt they took on for FCA will need tending. They remain a small company, so R&D and capital performance needs to be well managed; developing additional platforms would be eye bleedingly expensive and need a certainty of profitable payoff. At the same time, they have a big hole in their highly capitalized engine manufacturing given Maserati's issues and the delays in Alfa cars.... Plus, to expand volumes meaningfully, they would have to add a lot of cost given their current manufacturing and supply chain model. A big difference between a fashion house or (trendy) luxury consumer goods maker and Ferrari is that only Ferrari has to lay out massive R&D and capital to eventually have a product they can deliver.

 

I really think the stock price has more to do with the debt that has been added to Ferrari's balance sheet than current sales which increased in 15 over 14. Sales are strong. Lets face it even if Ferrari increase production up to 9000 a year in the future it should not be hard filling those orders worldwide even with a downturn in the worldwide economy. Hopefully we will find out soon if a new Dino will happen or not. I think that car could help the bottom line, increase production numbers , make investors happy and help the brand grow with minimal damage to exclusivity.

 

Generally agree, but the incremental profitability they need, and revenue growth they need to show, are "easier" (faster, cheaper, lower risk) via exploiting the current platforms (i.e. build more of what they have).

IF they built 9,000 cars, that would mean perhaps 300-400 more new cars in North America, or 10 more per dealer. They'd likely have to compensate with sweeteners on the financing side and CPO supplements to reinforce the used market to keep dealers happy; they'd also probably tighten down the service/parts stream as tight as they legally can to channel more work to dealers.

My own opinion is the "Dino" would be an extreme investment right now, particularly at a Cali T price point, at least within the next 3-4 years. I guess it could end up being a "McLaren 570" exercise of a 488 tub, V6TT engine, and lower cost components (eg. standard dampers, no ceramic brakes, no e-Diff, etc), but that would go against the grain of the luxury segment.

Also, the optics tend to focus on the total number of units, revenue and profitability per unit, the fewer but higher priced the units, along with a strong backlog and big capital efficiency is the recipe they broadcast. 9,000 units won't hurt, as long as the other indicators remain strong.

 

I agree with everything you are saying. However would Ferrari consider using the 4C platform/tub for a new Dino? If so that could dramatically decrease investment costs. The new V6 turbo could be installed, magnetic dampers, e-diff, and power steering etc.. Enthusiast may make a big fuss about platform sharing but I believe Ferrari could get away with this since the tub is carbon. I would think their biggest concern would be making the car too good which could steer normal 488 buyers to this new "fictional" Dino.

 

IIRC, the current 4C platform "times out" with regard to US, if not EU and other countries, in terms of compliance for safety standards. I think the 2017 issue in the US is side airbags related (not positive), the Dodge Viper has a similar issue. (The 4C Spyder has a longer shelf life)

If anything, Alfa could use a boost via a new 4C, assuming they ever actually do release cars in the market. Having said that, the 4C has a lot of the elements people seem to be clamoring for (decent engine, DCT, CF tub, light/tossable, "raw") but then again, they are not flying off the lot at $60-75K price points. A "Dino" would be...what? that, with more power? I also think the "Dino" concept and market segment is being road tested right now as the McLaren 570...

Sergio and FCA are fans of modular architecture, though Chrysler just this week essentially abandoned the small car/sedan market and will be outsourcing those vehicles. Ferrari has a lot of "re-use" - engines, gearboxes, brakes - which leaves the chassis and suspension as platform variables. I could imagine them trying to have the next round of the "Cali" be both a front-and-mid engine platform....but that's 4 years out.

 

I think the Dino will help a lot they can even produce a modern Mondial based on the Dino

 

The stock was over value when launched. Now it's not going down, it's just adjusting to the real value.

 

Correct as it was originally on a P/E of 25 in a deflationary world, buy the metal instead of the paper !!