BMW Profit Beats Estimates on Strong Demand for Top-End Cars
(Bloomberg) -- BMW AG said earnings rose 12% in the first quarter even as the war in Ukraine and Covid-lockdowns in China disrupted the automaker's supply chain.
Group earnings before interest and tax rose to 3.39 billion euros ($3.6 billion) in the first quarter, the company said Thursday, exceeding analyst estimates of 2.9 billion euros.
BMW confirmed the outlook for the year that it outlined in March, when it said Russia's invasion of Ukraine will push down automaking returns to between 7% and 9%. That's slightly less than the 8% to 10% range it had estimated before the war broke out.
The Bavarian carmaker and its rivals have shifted production to higher-margin models as output has been hampered by the semiconductor shortage and other supply-chain problems. Despite delivering 6% fewer cars in the first quarter, BMW's auto revenue rose 17% compared with the same period last year.
“Never before in the history of our company have our pre-orders been higher than they are today,” Chief Executive Officer Oliver Zipse said. “The markets signal that this high demand will continue.”
BMW's shares rose 2.2% at 10:04 a.m.
Profitability in BMW's auto division was behind rival Mercedes-Benz AG, which posted a record margin of 16.4% for its cars division in the first quarter. BMW's operating return on automaking was 8.9% in the first quarter, compared with analyst expectations of 7.8%.
Group revenue was buoyed by the full consolidation of BMW's China joint venture, which contributed 3.3 billion euros since mid-February, BMW said.
BMW's automaking returns are expected to pick up during the second half of the year. In mid-April, BMW presented the new generation of its flagship 7 Series, including the i7 all-electric variant, which will go on sale in November. An upgraded version of its high-margin X7 SUV will be sold from August onwards.
©2022 Bloomberg L.P.
-
Signature Play: The Classic Cocktail Is Dead. Or Is It?
Classic cocktails are disappearing from India's cocktail menus. But they're still being ordered, taught to bartenders and borrowed from. So, who's really having the last drink?
-
A New Samvat Wishlist: Inclusive Prosperity And Human Development
India has strengthened its economic foundations through infrastructure, digital access and enterprise. Its next growth chapter must deepen productivity, create better livelihoods and widen participation in prosperity.
-
Love, Sex Aur Dhokha: The Audacious Plot To Spy On Jensen Huang
A Taipei dinner, a Singapore chip buyer and a suspected Chinese asset: inside the alleged spy operation that got close to NVIDIA's Jensen Huang.
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
