Aston Martin shares plunge 20% after volume target cut

British luxury carmaker Aston Martin’s shares tumbled more than 16% on Wednesday morning after it cut its sales target and posted a larger-than-expected quarterly loss due to production problems with its new DB12 model.

Aston Martin reported an adjusted operating loss of 48.4 million pounds ($58.8 million) in the three months to the end of September, on net income of 362.1 million pounds, below the company-prepared consensus forecast of 370 million pounds.

Deliveries of the next-generation DB12 sports car began last quarter and the company now expects sales of 6,700 units in 2023, down from its previous forecast of around 7,000 units.

“DB12 production growth is temporarily impacted by delays in supplier readiness and integration of the new EE platform supporting a completely redeveloped infotainment system,” Aston Martin said in its earnings report on Wednesday.

The company added that the issues have now been resolved but impacted third-quarter sales and full-year production capacity.

Aston Martin executive chairman Lawrence Stroll said the launch of the DB12 had generated “extraordinary demand” and brought in new customers, with 55 per cent of initial DB12 buyers being new to the brand. client. The company will launch a second new sports car in the first quarter of 2024 and expects to receive a “similarly enthusiastic response.”

“Starting deliveries of our next-generation sports car is an important milestone, marking the start of a new range of front-engined sports cars that will reposition Aston Martin as an ultra-luxury performance brand, fuel our growth and deliver greater A high level of profitability,” Stroll added.

The company maintained its outlook for 2023 and said strong demand for its next-generation sports car was driving its plans to boost cash and profits.

The UK household name is trying to raise more than £200m from investors this summer to pay down its massive debt. Russ Mould, investment director at British stockbroker AJ Bell, said the disappointing earnings came at a bad time for hopes of a recovery in Aston Martin’s share price.

“The company is seeing strong demand, but with losses larger than expected, there is no reason for the market to give Aston Martin the benefit of the doubt for even the smallest misstep,” he said.

“There is currently a lack of confidence in forecasts for 2024 revenue of £2bn and adjusted earnings of £500m.”