BMW roars ahead
The Local · 3 Nov 2010, 13:19
Published: 03 Nov 2010 13:19 GMT+01:00
BMW said that net profit leapt 11-fold from the equivalent figure last year, to €874 million ($1.2 billion), and raised its closely-watched profit margin target for this year.
The latest data on auto sales in Europe generally show a slump from levels last year which were stimulated by now phased-out government subsidies. But premium autos are in demand, and BMW "does not expect that to change in the short term," finance director Friedrich Eichiner told a telephone press conference.
Analysts polled by Dow Jones Newswires had forecast a slightly more modest gain of 914 percent to €791 million.
Generally speaking, the premium sector is still doing better than the rest of the automobile market," Bank Metzler auto analyst Jürgen Pieper told AFP. He added however that "BMW's results are a little disappointing compared with those of Audi and Daimler," and BMW shares showed a small loss in midday trading on the Frankfurt stock exchange.
Third-quarter sales nonetheless gained 35.6 percent to €15.9 billion from €11.76 billion, exceeding the €14.27 billion expected by analysts.
Frank Schwope, an analyst at NordLB bank, said BMW showed "very strong development in the third quarter, following the path set by Daimler and Volkswagen," which own Mercedes Benz and Audi, respectively.
Like those premium automakers, BMW suffered a heavy slump in 2009, though it still managed to post profits.
Core earnings at the German group this time around climbed to €1.19 billion from €55 million in the third quarter of 2009, but missed an average analyst forecast of €1.25 billion.
BMW said it still planned to sell more than 1.4 million vehicles this year, and raised the forecast for core profit margin from its auto division to more than seven percent from more than five percent previously.
BMW also said it was now aiming for a profit margin of between eight and ten percent for its core auto activities in 2012.
Schwope said Audi, BMW and Daimler now "present comparable operating margins of around 8.8 percent."
Looking ahead, BMW said: "The broad recovery taking place on international car markets gives reason to believe that sales volumes will be significantly higher, particularly in emerging markets.
"Economic recovery is also likely to continue in the USA, giving sales volumes another boost," the car maker added.
BMW forecast "a significant increase in group pre-tax earnings for the full year 2010," but did not provide a detailed figure.
Shares in the company showed a loss of 0.82 percent to €51.92 in midday Frankfurt trading, while the DAX index of German blue-chips was 0.23 percent higher overall.