While the rest of the world is focused on banning internal combustion engines, one manufacturer seems to be showing that demand for them is still robust: Ferrari.
The luxury automaker, whose CEO this week said he didn't think the company would ever completely give up on internal combustion engines, posted a surprise earnings beat on Tuesday morning that sent its stock soaring 7% during the session.
And the company's earnings weren't just a signal that the market isn't done embracing ICE vehicles; it was also a statement that the automotive recovery, at least among the super-rich, is in full swing. After all, people have to spend their newly-printed PPP money somewhere, right?
The company posted $1.08 per share in earnings on $1 billion in sales on Tuesday morning. The company's bottom line beat analyst expectations, which were set at 96 cents, and the top line met expectations. The company's operating profit margins also rose 0.2% on the year.
During the quarter, Ferrari shipping 2,313 vehicles. While this number was down slightly, by 161 units, from the year prior, the company said it wasn't due to Covid, according to Barron's. Instead, management placed the blame on something far more innocuous: "product cadence".
Sequentially, the company's earnings showed a stark recovery from the pandemic. Vehicle shipments were up by more than 900 vehicles over Q2, when the company lost 7 seven weeks of production due to Covid-19 in Italy.
Recall, we have noted that the overall auto market has recovered significantly since the worst days of the pandemic in Q2. In China, the world's largest auto market, we noted just days ago that there was a "sense of euphoria" in auto dealerships as they recovered.
New vehicle sales were up 17% to 2.6 million in September as a result of massive government intervention and spending on infrastructure projects. Sales of commercial vehicles and buses were up 40% as a result. Light vehicle sales were up 8% for September, approaching 2.1 million.
We noted back in early September that if China is truly the leading indicator globally, a V-shaped recovery could be in store for the rest of the world in coming months. China's vehicle sales rose to 2.18 million units in August, according to preliminary data released by the China Association of Automobile Manufacturers and Bloomberg.