Ferrari (Ferrari (RACE)) shares took a dip Tuesday after the luxury automaker reported first-quarter earnings that beat expectations but offered a 2026 outlook that left analysts wanting more. The stock was down about 4.4% at $333.62 in afternoon trading.

The Italian carmaker posted revenue of €1.85 billion ($2.16 billion), up 3% from a year ago and slightly above the consensus estimate of $2.12 billion. Earnings per share came in at €2.33 ($2.73), topping expectations of $2.70. So the quarter itself was solid — the issue is what's ahead.

Segment Performance and Margins

Revenue from cars and spare parts rose 1% year over year, driven by a richer mix of sports cars and higher personalization — that's where customers pay extra to make their Ferrari uniquely theirs. Sponsorship, commercial and brand revenue jumped 14%, helped by stronger sponsorships and lifestyle activities.

Total shipments fell 4.4% to 3,436 units, but that was by design as Ferrari manages through a planned model transition. The company noted that deliveries "were not impacted by the surge of hostilities in the Middle East, as Ferrari leveraged its geographical allocation flexibility, bringing forward certain deliveries to other regions." In other words, Ferrari found a workaround: it shifted cars meant for the Middle East to other markets where demand is strong.

EBITDA rose 4% to €722 million, with the margin expanding 40 basis points to 39.1% — a testament to pricing power and cost control. Net profit was nearly flat at €413 million. Operating cash flow totaled €863 million, and free cash flow reached €610 million. Ferrari reported net industrial cash of €388 million as of March 31, swinging from net industrial debt of €32 million at the end of 2025. Cash and equivalents stood at €1.86 billion.

Strategy and Operations

Ferrari said performance was supported by strength across segments and remained in line with its full-year outlook despite geopolitical pressures. The company improved product mix and personalization in its core sports car segment while intentionally reducing deliveries. Shipments increased for models including the 12Cilindri, Purosangue and SF90 XX. Ferrari also ramped up production of the F80 supercar and launched new models such as the Amalfi Spider.

Beyond vehicles, Ferrari reported higher racing revenue from sponsorships and engine rentals to Formula 1 teams. Its lifestyle segment expanded through licensing initiatives, a new flagship store in London and exhibitions at its Modena museum.

Executive Commentary

Chief Executive Officer Benedetto Vigna said a richer product mix and strong demand for personalization supported earnings. He added that the company's order book extends into late 2027, underpinning its 2026 guidance. That's a nice problem to have — customers are willing to wait more than a year for their Ferrari.

Vigna told CNBC that demand is building ahead of the Ferrari Luce world premiere, with the launch event fully booked. He said customer response will ultimately determine the model's success.

During the quarterly earnings call, Vigna said that despite temporary logistics challenges in the Middle East, the company has implemented alternative solutions to continue serving clients in the region. He added that Ferrari kept deliveries flat year over year in the Middle East during the first quarter and is not seeing any unusual or abnormal order cancellations. So the geopolitical tensions haven't spooked Ferrari's wealthy clientele — at least not yet.

Outlook

Ferrari reiterated its fiscal 2026 revenue forecast of about €7.5 billion ($8.731 billion), below the analyst consensus of $8.88 billion. The company expects adjusted earnings per share of at least €9.45 ($11.00), compared with estimates of $11.35. That gap explains the stock's decline: investors were hoping for more aggressive guidance.

The company said its guidance incorporates current visibility on the Middle East crisis, which it continues to manage actively. For now, Ferrari is threading the needle — delivering strong margins and finding creative solutions to geopolitical headaches, even if the top-line outlook isn't thrilling the Street.