Porsche's new SUV may boost income as other sales drop

Porsche AG, the world's most profitable carmaker, said first-half net income will rise 14 percent, helped by sales of its new Cayenne sport-utility vehicle and the brand's image, investors said.

Net income will be 101.7 million euros (US$109.6 million) in the six months ending Jan. 31 compared with 89.4 million euros in the year-ago period, Chief Executive Wendelin Wiedeking said at the annual shareholders meeting. Sales will gain 20 percent to 2.2 billion euros.

Porsche is counting on the Cayenne, which has a base price of 60,000 euros, to boost revenue and profit. Wiedeking reiterated that earnings and sales in the year ending July 31 will exceed last year's records and said Porsche already has orders for at least 25,000 Cayennes, or a year's worth of production.

"We're still confident that the company is well-placed" for growth, said Carsten Osswald, who helps manage about 800 million euros at PEH Wertpapier and sold his Porsche shares last year.

The carmaker's profit as a proportion of sales in its last fiscal year was 16 percent compared with a 9 percent operating margin for Toyota Motor Corp., the world's third-largest automaker.

The 340hp Cayenne S is designed to lure buyers from Bayerische Motoren Werke AG's X5, which starts at about 41,600 euros, DaimlerChrysler AG's Mercedes-Benz M-Class, with a base price of about 38,000 euros, and Ford Motor Co's new Land Rover.

Pretax profit in the first half will gain 18 percent to 185.1 million euros, beating the average 171.9 million-euro forecast of seven analysts surveyed by Bloomberg News. Analysts had on average expected first-half sales of 1.96 billion euros.

Vehicle sales will rise 5.2 percent in the first half to 24,684, including 1,510 of the new Cayenne. Sales of the 911 sports car will increase 4.3 percent to 13,697 models, while sales of the Boxster will be down 8 percent to 9,477 cars.

Demand for the Boxster and the 911 is declining in the US. Total sales in North America were 1,387 cars in December, a 22 percent decline. Sales of the Boxster fell 29 percent, while sales of the 911 model fell 15 percent.