BMW profit falls more than expected
German car maker hit by upfront expenditure for electric car development
German car maker BMW reported a fall in profits. Photograph: Regis Duvignau/Reuters
German carmaker BMW on Wednesday reported a 27 per cent drop in third-quarter operating profit to €1.75 billion, missing analyst expectations amid currency headwinds and higher research and development expenses.
Analysts in a Reuters poll had on average expected earnings before interest and taxes (EBIT) to come to €1.795 billion.
BMW said that despite a slight rise in deliveries of luxury cars, its operating return on sales for the automotive division narrowed to 4.4 per cent from 8.6 per cent a year earlier, well below its targeted range of 8 to 10 per cent.
Earnings were hit by higher raw material prices, currency effects, higher provisions for goodwill and warranty measures, tariffs between China and the United States and a price war in Europe, the carmaker said.
Last month BMW warned its pretax profit would fall this year, against earlier expectations for a flat outcome, and cut its profit margin guidance for cars, blaming intense price competition.– Reuters