Shares of Italian supercar maker Ferrari N.V. (NYSE:RACE) fell sharply in trading on Wednesday. In his first earnings call since taking the top job, Ferrari's new CEO seemed to walk back earnings-growth expectations set by his late predecessor, characterizing a key profit target as "aspirational."
Ferrari's shares closed at $118.00 in New York, down 11% from Tuesday's closing price.
Ferrari reported its second-quarter earnings result before the market opened on Wednesday, and the numbers were mixed. While earnings per share of 0.84 euros beat Wall Street's 0.81-euro average estimate, Ferrari's 906 million euros in revenue fell short of expectations on unfavorable exchange-rate shifts.
That revenue shortfall wasn't really the issue, though. Analysts on Ferrari's earnings call became concerned after new CEO Louis Camilleri, who succeeded the highly regarded Sergio Marchionne less than two weeks ago, seemed to walk back an aggressive profit-growth target that had been set by Marchionne earlier this year.
In January, Marchionne said that Ferrari's adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) would reach 2 billion euros annually no later than 2022 -- roughly double the 1.04 billion euros in adjusted EBITDA that Ferrari generated in 2018.
That target seemed to give considerable support to Ferrari's lofty stock price. But Camilleri seemed to want to reduce expectations, describing Marchionne's target as "aspirational" early on. Pressed by an analyst, he said, "That number [2 billion euros in adjusted EBITDA] is certainly an aspirational target, and we will do everything we can in terms of our plans to get there. Beyond that, I can't tell you."
Needless to say, that didn't go over well with investors who were already concerned about the company's future without Marchionne.
Marchionne had planned to present Ferrari's growth strategy in detail in a briefing for investors in September. Camilleri confirmed that Ferrari will stick to that plan. Investors will have to wait several more weeks to learn how -- and perhaps if -- Ferrari intends to double its profit over the next four years.