BMW reveals first-quarter earnings rising nearly 19% to 2.13 billion euros

Article by Christian Andrei, on May 4, 2012

BMW has achieved earnings for the first quarter that surpassed even the most optimistic estimates of analysts. The company has benefited from the leap of sales of its most expensive sedan as well as from the strong demand in the United States and China. 

Specifically, the company's EBIT or earnings before interest and taxes increased almost 19% from 1.8 billion euros on the same quarter last year to 2.13 billion euros or $2.80 billion, a great portion of which comes from its core vehicle business where EBIT as a percentage of revenue dropped a little to 11.6%. This is close to the 10.7% estimate made by analysts. Meanwhile, sales increased 14% to 18.3 billion euros, fueled by the surging sales of high margin automobiles such as its SUV lineup and the 7 series flagship sedan. 

CEO Norbert Reithofer revealed that the BMW Group intends to "grow faster than the market as a whole" in 2012 and expects to hit new sales volume records for the Mini, Rolls-Royce and BMW brands.

On the other hand, Finance boss Friedrich Eichiner stated that the company would revisit its guidance after the second quarter. At present, the company anticipates the operating margin in its core passenger vehicle business to be at the higher end of its 2012 target which ranges from 8% to 10%. 

Specialist salesman David Arnold at Credit Suisse in London commented that "the bears might say" the automaker did not update their whole-year guidance, but it was "foolish" to be expecting anything else at this moment in the year considering that the automaker itself revealed that it might mull over its target only after first-half results. Analyst Hans-Peter Wodniok at Kronberg-based Fairesearch in Germany stated that the higher revenue gain reveals that prices rose, leading to greater profit. He noted that the sport utility cars "did very well." He also said that the 1 series "shot off like a rocket."

Topics: bmw, earnings

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