Jaguar Land Rover said fiscal third-quarter profit growth stalled due to Evoque, currency shifts

Article by Christian Andrei, on January 25, 2013

Jaguar Land Rover cited currency shifts and the popularity of its more affordable Evoque model as the reasons for the stagnation of its fiscal third-quarter profit growth. In a U.S. filing, the company said that earnings before interest, taxes, depreciation and amortization in the quarter through December likely matched figures for the previous two quarters.

It also said that the sales margin was probably a bit lower. Bloomberg said that in the two prior quarters, the margins of Jaguar Land Rover declined. The company said that the Ebitda performance reflects "less favorable exchange rates" and "the ongoing effect of a higher mix" of SUV sales. In the six months ended Sept. 30, the less expensive Evoque SUV made up nearly 30% of Land Rover's wholesale deliveries.

According to the brand's Web site, the SUV, which started deliveries in September 2011, is priced at slightly below 29,200 pounds ($46,300) compared to the 38,825-pound starting price for Land Rover's Discovery 4, a bigger SUV. Umesh Karne, an analyst with BRICS Securities Ltd. in Mumbai, said that the company is concerned about lower margins. He said that it is concerned about the suggestion that capital expenditure will be higher and also about negative cash flow as it factored positive cash flows into the share price.

In the year that started on April 1, Jaguar Land Rover could have negative free cash flow as the unit increases annual capital spending to 2.75 billion pounds from 2 billion pounds to create models and construct a plant in China. The unit said that free cash flow was likely also negative in the third quarter.

It said that the luxury division of India's Tata Motors, which has cash of 2.18 billion pounds, may raise more funds for investments from capital markets and through bank loans. The division said that detailed fiscal third-quarter figures will be divulged with Tata Motors' earnings statement this February.

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

Did you miss the opportunity to get a brand new Dodge Viper? Well, here’s something you don’t want to miss. Dodge has announced a “final call” for orders for its...
by - December 6, 2016
Acura fans and customers rejoice! Sales have begun for the flagship model of Acura’s RLX top-of-the-range sedan – the 2017 Acura RLX Sport Hybrid. Described by Acura as its most...
by - December 6, 2016
Autonomous cars are slowly but surely gaining more appeal among drivers around the world. While a complete self-driving system has yet to be launched, carmakers have been finding ways to...
by - December 6, 2016
BMW has officially ended the production cycle for what is considered as its meanest and fastest sports car – the BMW M4 GTS. Basically a power-up evolution of the BMW...
by - December 6, 2016
Now that Lamborghini is set to bring a “more aggressive” Aventador, it only makes sense that it will be given a name. Seeing how it goes, perhaps we won’t be...
by - December 6, 2016
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries