Crisis-hit Porsche plunges to $1.1 billion quarterly loss

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By Rachel More and Ilona Wissenbach

BERLIN/FRANKFURT (Reuters) -Porsche swung to a bigger-than-expected operating loss in the third quarter, it said on Friday, plunging the German sports carmaker deeper into crisis as it slows a shift to electric vehicles and battles to stem sinking sales in top market China.

The news highlights how the automaker, pitched as the epitome of German engineering prowess when it went public in 2022, has been thrown off course in recent months, most notably by U.S. import tariffs and a relentless price war in China.

The group posted an operating loss of 966 million euros ($1.1 billion), compared with a 974 million euro profit in the year-ago period, hit by expenses to cover a major rollback on its EV expansion announced last month.

Analysts polled by Visible Alpha had expected an operating loss of 611 million euros in the July-to-September period.

HITTING ‘TROUGH’ IN 2025, HOPEFUL FOR 2026

For 2026, Porsche expects its profit margin to recover to a high single-digit percentage, finance chief Jochen Breckner said, versus a best-case scenario of 2% for this year, an outlook Porsche confirmed.

“We expect 2025 to be the trough that precedes a noticeable improvement for Porsche from 2026 onwards,” Breckner said, warning that large-scale solutions were needed in current restructuring talks with labour representatives.

Breckner said U.S. import tariffs would result in a roughly 700 million euro hit this year, adding Porsche would propose a significantly lower 2025 dividend than the 2.31 euros per preferred share paid for 2024.

Breckner said Porsche prices will rise further in the U.S. in coming months as the company passes on tariff costs to consumers.

Porsche CEO Oliver Blume, who is also CEO at parent Volkswagen, will hand over the top job at Porsche to former McLaren Automotive CEO Michael Leiters at the start of 2026, the group said last week, following long-standing investor criticism over the dual role.

Leiters is set to inherit one of the biggest crises in Europe’s beleaguered auto sector.

POSSIBILITY OF FURTHER JOB CUTS

As for China, once a key profit driver for Porsche and parent Volkswagen, Breckner said sales are expected to extend this year’s decline into 2026.

“We have to assume that the general market conditions will not improve in the foreseeable future,” Breckner said.

Porsche already plans to cut 1,900 jobs in the coming years, on top of 2,000 layoffs for temporary workers this year, with a second package of measures expected by the end of the year.

Asked about a second package of cost-saving measures under negotiation, Breckner said Porsche was targeting “significant measures” focused on salary levels and additional perks rather than job cuts.

Following a series of profit warnings this year, the carmaker maintained its 2025 guidance on Friday, forecasting a return on sales of up to 2% – down from 14% last year.

For the whole year, Porsche expects a 3.1 billion euro hit to earnings from its EV strategy overhaul, a decision to scrap in-house battery production and restructuring costs.

($1 = 0.8575 euros)

(Reporting by Rachel More and Ilona Wissenbach; Editing by Christoph Steitz, Mark Potter and Richard Chang)