BMW Profits Soar Despite China Sales Slow Thanks to Record SUV Sales
FRANKFURT: German carmaker BMW has proved naysayers wrong by beating the first-quarter profit forecasts. This is great news not just for the luxury carmaker, but also other carmakers as well.
This prompted the companyâ€™s shares to go up by as much as 1.7 percent in early Wednesday trading. Now there are reports that more than a twenty percent rise in operating profit may kill rumors that the company was losing its ground in the luxury SUV market.
Evercore ISI analysts while talking about the â€˜turnaroundâ€™ say, â€œWhilst the market has been focused on BMW’s weak product momentum, poor import sales into China and overall China headlines, the company once again printed a very strong quarterâ€. The company is excited about the BMW future and have a “buy” rating on BMW shares.
Reports suggest that income before interest and tax (EBIT) were reported to be 2.52 billion euros ($2.83 billion), clearly trashing the experts estimate of 2.19 billion euros. It was also helped by a double-digit million euro gain from derivatives used to hedge currency moves. Latest updates suggest that the BMW’s automotive EBIT margin was as much as 9.5 per cent in the quarter. This shows the company being far ahead of Daimler’s Mercedes-Benz, and at the upper end of its target range of 8-10 per cent.