F1 supplier PWR Holdings eyes worst day ever as FY earnings miss estimates

PWR Holdings

16/08/2024 06:34

By Rajasik  Mukherjee
       Aug 16 (Reuters) - 
    Australia's PWR Holdings'  PWH.AX  shares slid nearly 21% on
Friday, on track for their worst day ever, after the Formula One
car parts supplier's annual earnings missed market expectations.
  
        The company's shares also fell to their lowest level
since Jan. 15.
  
    PWR Holdings, which provides hi-tech cooling systems to a
majority of F1 racing teams, reported a 14% rise in net profit
after tax to A$24.8 million ($16.4 million) for fiscal 2024, but
fell 7% short of Visible Alpha estimates. Analysts at Citi
expected a net profit of A$27 million.
        The firm attributed the jump in profit to higher revenue
in its Australia, U.S., and UK operations.
  
    The Queensland-based company also reported a 17.8% rise in
annual revenue to A$139.4 million, but missed Citi and Visible
Alpha estimates of A$141 million and A$142 million,
respectively.
    "(We) see the potential for 5-10% downgrades to FY25e-26e
(estimates) consensus earnings due to management's comments of
near term margin pressures," Citi said in a note. 
    Additionally, PWR Holdings said it had set aside about
A$37.6 million in funds, with A$1.3 million already used in
fiscal 2024 for the construction of a new factory in Queensland.
    While Citi said that the projected overall expenditure was
higher than expected, it would wait for the management's
comments on plans for the factory. 
    

($1 = 1.5097 Australian dollars)

 (Reporting by Rajasik  Mukherjee in Bengaluru; Editing by Sonia
Cheema)
 ((Rajasik.Mukherjee@thomsonreuters.com;))