Shares of Ferrari were Skyrocketing on Strong Earnings and Upbeat Guidance

Shares of luxury sports car maker Ferrari saw gains of over 12% on Thursday after the company reported a strong earnings report and gave stellar guidance for 2019.

The Italian sports car maker said it expects adjusted earnings before interest, taxes, depreciation and amortization rise to as much as 1.25 billion euros ($1.43 billion) this year.

“There was concern 2019 was a transition year that could see margins fall,” Adam Jonas, an analyst at Morgan Stanley noted.

CEO Louis Camilleri also told analysts that the company would discontinue licensing agreements this year for products that “we do not deem to be in keeping with our brand equity.”

The CEO is also adding limited-edition new models to raise selling prices. The five new models to be unveiled this year include the hybrid supercar.
For 2018, the company reported that profits rose 46 percent to 787 million euros ($904 million), while shipments rose 10 percent to 9,251 vehicles. Net revenues were flat at 3.4 billion euros.

“This confidence is despite a backdrop of uncertainty and potential macro threats, including trade tensions, the China slowdown, Brexit, currency volatility and what the IMF recently euphemistically described as palpitations in financial markets,” Camilleri said

“Walk into a Ferrari store today and it is obvious that some of the products do not fit our brand image and our luxury positioning,” Camilleri also added.

According to the CEO, the new strategy will focus on premium products for customers, higher quality goods for Formula 1 fans and entertainment.

Disclaimer: We have no position in Ferrari NV (NYSE: RACE) and have not been compensated for this article.