(Update: Statements on 2026 charges, pre-market price, analyst.)

STUTTGART (dpa-AFX) - Following last year's slump in profits, sports car manufacturer Porsche AG has set surprisingly low profitability targets for 2026. The operating return on sales for the Group is expected to be between 5.5 and 7.5 percent, the Volkswagen-owned company announced in Stuttgart on Wednesday. Analysts had recently penciled in an average of almost 8 percent for the new year. Management under new CEO Michael Leiters expects revenue of 35 to 36 billion euros.

"Global challenges and the realignment of the company weighed on the 2025 result. In 2026, our recalibration measures will also have one-off earnings effects in the high three-digit million range," said CFO Jochen Breckner, according to the statement. This is being accepted in order to strengthen Porsche's resilience.

The MDax-listed share gained almost six percent in pre-market trading compared to the Xetra close the previous evening. The stock was quoted at over 39 euros on the Tradegate trading platform, which would continue its recovery from the slump following the Iran war. Analyst Philippe Houchois from the US investment bank Jefferies spoke of a bleak outlook - although the newly announced additional special costs account for two percentage points or more of the operating margin, according to his estimate.

The billions in costs for extending the combustion engine lifespan largely consumed the company's profit in 2025. Profit after tax plummeted by 91.4 percent year-on-year to 310 million euros, the Group announced. In 2024, the Stuttgart-based company had still earned almost 3.6 billion on the bottom line. Revenue fell by almost a tenth last year to around 36.3 billion euros. The dividend is to be reduced from 2.31 euros per preferred share to 1.01 euros.

While sharp headwinds for the Swabians were already apparent in 2024, things got even worse last year. Business in China stalled, tariffs in the USA cost a lot of money, and the company's electric models were significantly less popular than expected. Former Porsche CEO Oliver Blume therefore overhauled the strategy before his departure - more combustion engines in the range are intended to provide momentum again.

Strategic shift weighs on profit

But the turnaround is costing a lot of money for now. Around 2.4 billion euros were incurred for this alone. In addition, the winding down of the battery subsidiary weighed in at around 700 million euros, and US tariffs at about the same amount. In total, this results in special costs of around 3.9 billion euros.

Operating profit slumped by almost 93 percent to 413 million euros. In the automotive business - i.e. excluding financial services - the operating profit was even only 90 million euros.

Overall, Porsche expects business to improve slightly again in the current year. However, management under new CEO Michael Leiters continues to expect "very challenging market conditions" - including in China, where the luxury segment remains under pressure. In addition, geopolitical uncertainties and US tariff policy are expected to persist. Potential impacts of recent developments in the Middle East have not yet been taken into account.

Leiters also announced a new strategy for the carmaker: "Since I took office, our leadership team has systematically analyzed the situation and initiated a series of initial targeted measures," the manager stated. Among other things, the management structure will be streamlined, hierarchies dismantled, and bureaucracy reduced. In addition, an expansion of the product portfolio is being considered. Leiters succeeded Oliver Blume at the beginning of the year, who has since focused on leading the parent company Volkswagen./men/jwe