BMW Profit Beats Expectations
BMW AG beat market expectations with an 11% rise in second-quarter net profit, helped by robust sales of the luxury auto maker’s three car brands, including a jump in demand for Rolls-Royce limousines.
The Munich-based manufacturer said on Tuesday that net profit rose to €1.94 billion ($2.2 billion) in the three months to end-June from €1.74 billion a year earlier, ahead of the average analysts’ forecast for €1.80 billion.
Revenue rose 4.5% to €25.01 billion, partly on a 5.7% rise in sales of BMW -brand cars and sport-utility vehicles to 507,814 units. Sales of the German group’s MINI brand rose 5.4% to 96,587, while Rolls-Royce sales rose nearly 15% to 1,133, leaving overall sales up 5.7%.
BMW said its operating profit margin at its automotive business widened to 9.5% from 8.4% as it also trimmed spending on research and development as a percentage of revenue in the second quarter.
The robust performance by BMW underscores the buoyant market for premium cars, dominated by German auto makers, though BMW-brand sales fell behind those of Daimler AG’s Mercedes-Benz in the first half of this year, while remaining ahead of Audi.
BMW confirmed its full-year target for a slight increase in pretax profit, but warned again of a volatile political and economic environment for the auto industry, not least in the aftermath of the June referendum vote in the U.K., where BMW’s MINI and Rolls-Royce units are based, to leave the European Union.
The company forecast U.S. sales in the second half of the year to be at the same level as a year earlier, despite intense competition. In the first half, unwillingness to make price concessions contributed to the sales decline in the U.S.
The auto maker said second-quarter growth in Europe—notably in Germany and the U.K.—and Asia offset a fall in sales in the U.S., down 9.7% in the second quarter, and offset the impact of unfavorable exchange rates in the period.
Among the models in its lineup, the auto maker said demand was particularly strong in the quarter for its range of BMW SUVs and the latest version of its top-of-the-range 7 Series sedan, in addition to its revamped MINI models . The auto maker said it has sold 514 Rolls-Royce Dawn cars, the latest addition to the super luxury British brand’s lineup, since its launch in March.