BMW earnings fall in quarter
Germany's BMW gave a tepid markets outlook after third-quarter earnings before interest and tax (EBIT) shrank 86 per cent amid a global economic slump.
Shares in world's biggest maker of premium cars fell 6.2 per cent earlier today, the biggest decliner in the DJ Stoxx European car sector index which was down 3.5 per cent.
Analysts cited disappointing third-quarter results - its core car business lost €76 million before interest and tax in the quarter - and a lack of apparent impetus to inspire confidence in the stock.
But BMW said today it still saw positive 2009 earnings thanks to cost cuts even as it repeated sales volume was set to fall 10-15 per cent.
"We expect that the markets will make a gradual recovery over the coming year", Chief Executive Norbert Reithofer said.
But the company said the traditional big three markets - North America, Europe and Japan - were expected to generate low and below-average growth in the quarters ahead and saw scant relief on the foreign exchange rate front.
"Given the current high levels of state and trade balance deficits and banks' needs to record high levels of write-downs in those two countries, there is a risk that the US dollar and the British pound will weaken further in the medium term."
BMW posted its first year-on-year volume gain this year in September and has forecast this would become a trend during the rest of 2009 thanks to launches of new models such as the BMW X1 and 5 Series Gran Turismo.