BMW races back into the black
German luxury car maker BMW said on Tuesday it had returned to profit in the second quarter and was in talks with French auto group PSA, but was cautious on its full-year outlook.
BMW said it had made a net profit of €121 million ($174 million dollars) in the three months from April to June, well above an average analyst forecast for a loss of €25 million compiled by Dow Jones Newswires.
In the first quarter, BMW had posted a net loss of €152 million. The second-quarter figure, while back in the black, was 76 percent less than the profit of €507 million BMW had posted in the same period a year earlier.
Combined with its loss in the first quarter of this year, BMW recorded an aggregate loss of €31 million for the the first half of 2009. Its main rival Daimler, which makes Mercedes-Benz, released its own second-quarter figure in late July, a loss of 1.06 billion euros and its third drop in a row.
A BMW statement said it managed to partially offset an 11-percent drop in sales, which fell to €12.9 billion, with lower costs. Unit sales shed 19.5 percent to 615,000 vehicles.
Core earnings before interest and taxes, which are closely followed by analysts, plunged by 60 percent to €169 million, but were nonetheless also better than expected.
Chairman Norbert Reithofer said in a statement that "even though some indicators suggest that the economic situation might improve in the second half of the year - we remain cautious."
Reithofer told a telephone conference that BMW was speaking with the French group PSA Peugeot Citroen about extending their cooperation which currently concerns motors for small cars.
"Good discussions have been held," he said.
A PSA spokesman declined to comment, but reiterated the head of the French automaker, Philippe Varin, had already said it "was not necessarly looking to do a lot more but was concerned above all with the quality of the cooperation."
BMW is also in talks with Daimler but "those talks are not yet completed" either, Reithofer said.
Citing "an increasingly competitive environment" and "high volatility of international financial and raw materials markets," BMW did not give a detailed outlook for this year.
"It is not currently possible to make further quantitative assertions regarding earnings," it said.
BMW repeated that it expected 2009 sales to be lower than in the previous year, but forecast a pickup in 2010 following the roll out of new models. Reithofer said BMW would not create a fourth brand for its "i" project of enviromentally friendly vehicles alongside BMW, Mini and Rolls-Royce, but that they would belong to the BMW family. The company plans to launch an electric city car by 2015.
In Tokyo meanwhile, Toyota Motor announced a smaller than expected loss in its first quarter and upgraded its outlook for the rest of the year.
Shares in BMW fell by 3.84 percent to €31.65 in midday trades on the Frankfurt stock exchange, while the DAX index of German blue-chips was 0.78 percent lower overall.