BMW’s 2Q earnings before interest and taxes (EBIT) are lower by 19%

Article by Anita Panait, on August 2, 2012

The BMW Group posted a 19-percent drop in earnings before interest and taxes for the second quarter of 2012 to EUR2.27 billion from EUR2.8 billion in the same period in 2011. The company, however, logged a 7.3-percent increase in sales to EUR19.2 billion. The company’s carmaking division posted a 16-percent dive in EBIT to EUR2.02 billion, with the margin at 11.6 percent of sales.

BMW has similar margins with Volkswagen's Audi division, while Daimler's Mercedes-Benz has margins of 8.6 percent. While the European market continues to be sluggish, BMW also pointed out the "intense market competition," referring to increasing incentive levels.

According to David Arnold and Arndt Ellinghorst, analysts at Credit Suisse Group, the German luxury carmaker is probably struggling with "increasingly unfavorable" car pricing. BMW chief executive Norbert Reithofer said in a statement that they are monitoring developments in various markets very closely. He added that the BMW group has a flexible production network, and that the premium car manufacturer is focused on maintaining profitable growth.

BMW is expected to have gained from the weakening euro, being the German luxury carmaker with the biggest exposure to exchange rate fluctuations. According to S&P Equity Research analyst Marnie Cohen, they expect a “solid tailwind” for BMW in 2012-2013, with the luxury carmaker having around EUR11.4 billion in 2012 net transaction exposure to US dollar/renminbi on estimates.

Rivals Mercedes-Benz and Audi also benefited from the weakening euro, posting EUR317 million and EUR300-400 million gains related to foreign exchange effects.

Topics: bmw, earnings

If you liked the article, share on:

Comments

Recommended

The primary suggestion of a 4x4 ute from French company Peugeot was first revealed in 2016. Fifteen months later, the production version is launched. Now, Peugeot is not shying away...
by - June 24, 2017
The new Jaguar E-Pace crossover will soon hold its official launch on July 13 and is expected to arrive at the showrooms by early next year. It couldn’t have come...
by - June 24, 2017
As prices of the original Shelby Cobra have skyrocketed into astronomical proportions, there are firms like Superformance that serve replicas to consumers who demand the same levels of performance at...
by - June 24, 2017
New and improved 2018 Subaru Legacy comes packed with a number of upgraded features from the get go - from the exterior to the interior. And the company has finally...
by - June 23, 2017
In an interview involving Lamborghini CEO Stefano Domenicali and Automotive News, the topic about the Urus was thoroughly discussed. This super SUV is scheduled to make its debut later this...
by - June 23, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries