BMW reports 14% rise in profits
BMW, the world's biggest maker of luxury cars, reported a 14 per cent gain in third-quarter profit as demand for the new 3-Series sedan and wagon offset a market downturn in Europe.
Earnings before interest and taxes rose to €2 billion from €1.76 billion a year earlier, the Munich-based company said in a statement today. Sales climbed 14 per cent to €18.8 billion.
"We have had a good third quarter, setting new sales volume, revenues and earnings records in the face of a challenging market environment," chief executive officer Norbert Reithofer said in the statement.
"Like the rest of the sector, we are now beginning to feel some headwind."
Buoyed by growth in China, BMW has largely been unscathed by the sovereign-debt crisis, which is set to cause the biggest drop in European auto demand in nearly two decades this year.
By contrast, Daimler's Mercedes-Benz has lowered profit targets and initiated a €2 billion cost-cutting plan.
The company, which also makes BMW and Husqvarna motorcycles, stuck to its full-year targets of beating 2011's pre-tax profit of €7.38 billion and reporting higher Ebit in its auto division.
BMW forecasts automotive profit margins to be at the "upper end" of a range of 8 per cent to 10 per cent of sales as long as the global economy doesn't deteriorate further. The company has also said it plans to deliver more than 1.7 million cars this year, posting new sales records at its BMW, Mini and Rolls-Royce brands.
BMW closed down 0.8 per cent at €64.49 yesterday in Frankfurt trading.
The stock has climbed 25 per cent this year, valuing the company at €41.3 billion. Ebit at BMW's car making division fell 9.3 per cent to €1.65 billion.
That led to a decrease of the margin to 9.6 per cent of sales from 11.9 per cent a year earlier.
Volkswagen AG's Audi brand, the world's second-largest luxury-car brand, reported a margin of 10.5 per cent last quarter, outpacing the 6.4 per cent at Mercedes. BMW has defended its sales lead over Audi this year.
Lifted by demand for the 1-Series compact and 3-Series sedan, the manufacturer delivered 1.11 million BMW cars and sport-utility vehicles in the first nine months, compared with Audi's 1.1 million. Mercedes delivered 965,000 vehicles.
Audi and Mercedes have both vowed to take the top spot from BMW by the end of the decade.