Record sales of SUVs helped German carmaker BMW to beat first-quarter profit forecasts, despite slowing demand growth in China.
Shares in the world’s biggest luxury automaker rose as much as 1.7 per cent yesterday, with analysts saying the 21 per cent rise in operating profit could help to quell concerns BMW is losing ground to rival Daimler.
“Whilst the market has been focussed on BMW’s weak product momentum, poor import sales into China and overall China headlines, the company once again printed a very strong quarter,” said Evercore ISI analysts.
Earnings before interest and tax (EBIT) came in at 2.52 billion euros (£1.86bn), beating analysts’ average estimate of 2.19 billion euros and helped by a double-digit million euro gain from derivatives used to hedge currency moves.
BMW’s automotive EBIT margin was 9.5 per cent in the quarter, ahead of Daimler’s Mercedes-Benz, and at the upper end of its target range of 8-10 per cent, thanks to record sales of high-margin sport-utility vehicles (SUVs).
By comparison, the quarterly return on sales from ongoing business at Mercedes-Benz was 9.2 per cent, while Audi’s operating margin slipped to 9.7 per cent from 10.1 per cent.
The launch of BMW’s new 7-series, a facelift for the 3-series and the new 5-series could help sales going forward.