Porsche posts €387 million third-quarter operating profit

The third-quarter rebound

The result beat analysts' expectation of €331 million, and the shares rose more than 2% after the results.

The nine-month picture is stronger than the quarter alone. Group operating profit reached €1.7 billion, up from €40 million a year earlier, as cost of sales fell by €3.2 billion. In the third quarter, strategic realignment expenses fell to about €300 million from €1.9 billion a year earlier. Nine-month revenue still slipped 6% to €25.3 billion, and third-quarter revenue fell 7.5% to €8 billion. The nine-month operating return on sales was 6.9%, which Porsche said was comfortably above the midpoint of its 5.5% to 7.5% full-year guidance.

Automotive net cash flow more than doubled to €2.5 billion, helped by €900 million from the sale of Porsche's stakes in Bugatti Rimac and Rimac Group. The automotive net cash flow margin doubled to 11.3%. Porsche also signed a sale agreement for MHP, a fully consolidated subsidiary with more than 4,500 employees, under its "Focus on the Core" programme.

The 2027 trough warning

Chief financial officer Jochen Breckner called 2027 a "transitional trough year" with lower volume and profitability than 2026.

Three things drive that in his account: the first full year without the combustion-engine Macan, continued weakness in China, and €300 million to €400 million of remaining restructuring costs. Breckner told analysts to "look through" 2027 and wait for the Sportwagenschmiede '35 strategy to show its effects in 2028 and beyond. The company still wants an operating margin of 10% to 15% over time, with 15% as the longer-term target, and expects the recovery to take several years.

Porsche confirmed a workforce reduction target of 9,000 full-time equivalents by 2032, and Breckner said no additional negotiations were needed to reach it. A Financial Express report on the 7 October capital markets day had put the same 9,000 cuts by 2030, about a quarter of the workforce; the company's latest call gave 2032 as the target date.

China, tariffs and the volume problem

Deliveries in the first nine months fell 16% to 178,532 vehicles, with declines in China, Germany and other parts of Europe.

Porsche sold 56,000 wholesale units in the third quarter and expects fourth-quarter volumes to be broadly flat. The phase-out of the 718 and the combustion-engine Macan weighed on volumes, as did reduced exposure to China. Deliveries in China have fallen by more than half over the past four years, according to a Reuters report cited by Yahoo Finance, as buyers there moved to local electric brands. On trade, Porsche plans on the assumption that 15% US tariffs stay in place. Breckner ruled out US production, saying Porsche's relatively low volumes make a shift too complex even with Audi's $4 billion factory in Georgia.

The all-electric Cayenne helped lift the battery-electric share to 22% of vehicle sales year to date. Revenue per vehicle rose by about €6,000 to around €126,000.

The write-down behind the warning

Volkswagen issued a profit warning after a €6 billion non-cash goodwill impairment on its 75% stake in Porsche, part of €10 billion in one-off charges mostly at the sports car brand.

The impairment cut the accounting value of Volkswagen's Porsche stake to roughly €10 billion, from €18.8 billion at the 2022 initial public offering. It followed a €2.7 billion write-down the previous year. Porsche's profit margin was 1.1% last year, down from 18% two years earlier. Volkswagen Group now expects a group profit margin of 1% at most in 2026, against earlier guidance of 4% to 5.5%. Volkswagen shares closed 5.6% lower on the warning and Porsche stock fell 3.3%. Jefferies analysts described the repeated write-downs as evidence of oversight issues at the group, according to the Yahoo Finance report.

Ferrari reported a 29.5% profit margin in 2025, against 8.3% at Skoda, 5% at Mercedes-Benz and 2.8% at Volkswagen, according to Financial Express.

What happens next

Porsche is relying on a new combustion-engine version of the Macan, due in 2028, and higher prices for top-end models to support profitability.

Full-year guidance for 2026 stays at a 5.5% to 7.5% operating return on sales. Production stays in Germany, and the planning does not assume tariff relief.