Demand for luxury cars drives BMW results
Strong global demand for luxury cars drove earnings at German automaker BMW sharply higher in the second quarter, it said Tuesday while forecasting a solid finish to the year.
BMW said second quarter net profit more than doubled from the same period a year earlier to €1.81 billion ($2.58 billion) on sales that were 16.5 percent higher at almost €17.9 billion.
"We expect the business environment to remain favourable during the second half of 2011," the automaker said in a statement.
BMW's second-quarter operating profit soared 66.3 percent to €2.86 billion. The results topped analyst forecasts compiled by Dow Jones Newswires for a net profit of €1.59 billion and an operating profit of €2.41 billion.
Investors welcomed the good news and BMW shares gained 1.11 percent to €68.46 while the main DAX index was 0.50 percent lower overall.
"BMW's magnificent second-quarter results exceeded already heightened street expectations," Dow Jones quoted Sanford Bernstein analyst Max Warburton as saying.
The German group said: "We expect to achieve a significantly higher group profit before tax for the full year 2011 compared to 2010, assuming economic and political conditions remain stable and that the global economy continues to grow."
In the second quarter, the carmaker which also owns the Mini and Rolls-Royce brands sold a record 450,608 vehicles, an annualised gain of 18.5 percent. For the first six months of the year, sales jumped 19.7 percent to 833,366. It issued a new full-year target last month of more than 1.6 million sales for 2011.
"The first half of 2011 has been the best six-month period in the BMW group's history," Chief Executive Norbert Reithofer noted in the statement.
BMW dealers have been delivering more cars worldwide, but especially in China and the rest of Asia, now the industry's global growth engine.
Reithofer told a telephone news conference he also saw a "high probability" that BMW will build a factory in Brazil, one of the most dynamic auto markets in the world. The decision will be made later this year.
German rivals Daimler, which owns Mercedes, and Volkswagen, which owns Audi, published solid quarterly results last week as well and raised their annual forecasts despite concern over debt problems in Europe and the United States.
BMW noted that "sales volume and earnings growth in the segment will, however, be held down during the second half of the year" by changes to some of its popular models and costs stemming from the launch of others.
"BMW profitability is stunning," Sanford Bernstein analyst Warburton said.
"We think that only Porsche and Ferrari can claim to have ever met or exceeded this level of profitability in the global auto industry."