Porsche profit jumps as China sales drop

Volkswagen-owned Porsche reported a sharp increase in operating profit for the first nine months of 2026, attributing the gain to a reduced reliance on the Chinese market. The company released its third-quarter results on Tuesday, showing a rebound in earnings despite shrinking sales volumes and lower revenue.

Operating profit for the nine-month period reached 1.74 billion euros, or $1.94 billion. This figure marked a steep rise from just 40 million euros in the same period last year. The previous year's low performance was largely due to approximately 2.7 billion euros in strategic restructuring costs.

Despite the profit recovery, the company saw its top line shrink. Sales revenue fell by 5.9 percent to 25.28 billion euros. Vehicle deliveries dropped 16 percent, totaling 178,532 units. North America remained the largest sales region for the brand by volume.

China, historically a vital market for German premium automakers, has become more difficult for foreign brands to navigate. Local competitors such as BYD, Geely, and Xiaomi have gained ground, particularly in electric vehicles, causing Porsche's sales in the region to decline sharply in recent years.

Chief Financial Officer Jochen Breckner spoke to the shift during the earnings webcast. He stated that the company's geographically balanced sales footprint provides resilience. Breckner noted that Porsche has significantly reduced its exposure to China, making the business less dependent on that challenging market environment.

Analysts at Citi said the nine-month results met expectations despite the challenges. They pointed to low deliveries and higher costs but observed that Porsche's underlying EBIT remained ahead of German premium peers. Citi projected that the company would return to double-digit operating profit margins, with recovery expected to begin in 2028.

Porsche shares traded 2.3 percent higher following the announcement. The company is cutting thousands of jobs as part of a wider restructuring plan aimed at lowering costs and responding to softer demand. Citi analysts described fiscal year 2027 as a trough year before a multi-year recovery in EBIT and net cash flow begins in 2028.