Aston Martin reported a wider-than-expected first-quarter pre-tax loss on Wednesday as the British luxury carmaker produced fewer cars and burned more cash than analysts expected, sending its shares tumbling 7%.
Aston Martin, which launched several modern cars last year including the next-generation DB12 and Vantage sports cars, has discontinued production of ancient models before ramping up production of modern models later this year.
“Our first quarter results reflect the expected transition period,” said CEO Lawrence Stroll.
Shares fell as much as 14% to their lowest level since November 2022, with the last decline of 7% occurring at 08:37 GMT. Second-quarter results are expected to be broadly similar to the first, but the group kept its 2024 forecast unchanged.
“In our view, this miss raises questions,” J.P. Morgan analysts wrote in a note.
In March, Aston Martin named Bentley boss Adrian Hallmark as its modern chief executive, to replace Amedeo Felisa later this year.
“I don’t expect there will be a significant deviation with Adrian’s arrival. In fact, I think we’ll double down and execution will remain the absolute priority,” Chief Financial Officer Doug Lafferty told analysts.
“We know the short-term priorities are to launch the product portfolio and build demand, reach the free cash flow inflection point in the second half of this year and achieve this momentum in 2025.” – added.
The company reported wider adjusted pre-tax losses of 111 million pounds ($138 million) for the three months ended March 31, compared with 57 million pounds a year earlier. Analysts on average expected a loss of £93 million.
Total wholesale volumes were below expectations and free cash outflow was also higher than expected in the quarter.
Aston Martin is scheduled to begin deliveries of its flagship V12 sports car, which will be powered by the modern engine, in the fourth quarter. The company has postponed production of its first electric vehicle by one year, to 2026.
