Sales plunged 16% yet profitability held! Porsche (POAHY.US) profits stabilize, with the 911 as a key support

Despite another sharp drop in vehicle sales, German legacy luxury carmaker Porsche (POAHY.US) has kept its profitability stable, with demand for the high-end 911 and high-priced derivative models helping the company cushion the impact of a weak performance in the Chinese market. Data showed that Porsche's revenue for the first nine months of 2026 was EUR25.282 billion, down 6% from EUR26.864 billion in the same period last year. A 16% decline in deliveries in the first nine months was an important reason dragging down revenue, although pricing and model mix cushioned this effect to some extent. However, the operating margin for the first nine months was 6.9%, higher than the nearly zero level in the same period last yearwhen heavy restructuring costs weighed on the company's earnings. Cash flow also improved. Among the factors, Porsche's sale of its stakes in sports car manufacturers Bugatti and Rimac Group played an important role in boosting cash flow. These asset disposals brought in nearly EUR1 billion in gains, strengthening the company's financial position. According to a statement released by Porsche on Tuesday, despite the revenue decline, favorable pricing and a higher-end model mix lifted profit, while asset sales drove an increase in cash generation capacity. These results show that even as Porsche is scaling down its business to adapt to a market environment with increasingly severe structural challenges, its profitability is beginning to stabilize. Porsche CEO Michael Leiters is working to reshape the company's profit model. In the past, this model was built on strong demand in the Chinese market, high factory utilization, and the continuous launch of highly profitable new models. However, these three pillars are now weakening simultaneously. At the same time, U.S. tariffs and Porsche's costly strategic pivot on electric vehicles have left the company having to spend heavily even as its former growth drivers gradually fade. The 911 model remains Porsche's strongest defensive pillar. Despite the overall contraction in the business, deliveries of this sports car still grew, and buyers continued to favor the high-priced GTS, Turbo and GT versions. This model mix helped offset the decline in demand in Porsche's Chinese market and the sales gap left by the discontinuation of the gasoline-powered Macan and 718 models. However, the 911 still cannot fully make up for the pressure brought by factories and R&D operations that were originally configured for sales volumes far higher than current levels. Leiters' top priority is to shrink Porsche to adapt to a tougher era. Porsche plans to cut more than 9,000 jobs, reduce management levels by 40%, and lower the annual sales volume needed to break even to about 200,000 vehicles. Leiters is also cutting R&D spending and concentrating resources on fewer, more profitable projects. In addition, Porsche plans to firmly move further upmarket. This strategy includes raising the price of its most distinctive sports cars by about 20%, expanding customized models and track-focused product offerings, and launching new models positioned above the 911. Earlier this month, Porsche unveiled a concept car called "Mission S," officially positioned as a mid-engine supercar platform above the 911, planned for production as part of its long-term product line. This car is not a fleeting limited-edition hypercar, but a core product under Porsche's "Sportwagenschmiede '35" strategy, aimed at filling the flagship gap after the discontinuation of the 918 Spyder and competing head-on with the regular supercars of Ferrari NV and McLaren.