BMW powers through second quarter towards record year

Agence France-Presse
BMW powers through second quarter towards record year
The German carmaker makes $2.2 billion of profit from April to June 2016

FRANKFURT, Germany – A favorable world auto market helped German carmaker BMW to post profits 11% higher in the second quarter than the same period last year, results released on Tuesday, August 2, showed.

The Munich-based firm said that it had made 1.95 billion euros ($2.2 billion) of profit on 25 billion euros of revenue.

Fueled by strong results, BMW has “the financial headroom we need to pursue our work on future technologies such as electric mobility and automated driving,” chairman Harald Krueger said.

“We forecast slight increases, and hence new record figures, for sales volume and profit before tax in 2016,” Krueger went on.

BMW outdid predictions from analysts surveyed by Factset, who had been expecting profits of 1.69 billion euros. (READ: Germany’s BMW celebrates 100th anniversary)

Welcoming the results as “solid,” analysts at DZ bank pointed to BMW’s higher-than expected profitability on car sales as a key factor making it a “top pick” among German carmakers.

But Deutsche Bank analysts suggested that performance could fade in the second half of the year as the firm faces increased costs.

Unit sales across BMW’s 3 car brands – BMW, Mini, and Rolls Royce – hit 605,534 between April and June, a 5.7% increase on the same period in 2015.

That brought underlying, or operating, profit to 2.7 billion euros – 8% higher than the same period in 2015.

Most of BMW’s growth came from Europe and Asia, with unit sales up 11.2% and 7.3%.

But unit sales in the Americas declined overall by 8%, with a double-digit drop of 10.2% in the important USA market.

Growth was largely driven by increased orders for flagship models such as the BMW 7 series.

The firm also said that electric models accounted for a larger proportion of vehicles sold.

Customers in the Netherlands and Sweden were particularly keen, with electric cars accounting for double-digit proportions of BMW car sales in June in the two Western European nations. – Rappler.com

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