BMW Confirms Guidance After Auto Margin Rises -- Update

By David Sachs

BMW backed its full-year targets after reporting an improved earnings margin for its auto division and higher revenue driven by car sales.

The German car maker said Friday that the automotive segment reported a 9.1% rise in earnings before interest and taxes to 3.135 billion euros ($3.33 billion) on higher sales volumes and despite pricier raw materials, BMW said. The EBIT margin for the automotive segment was 9.8% compared with 8.9% a year ago.

For the group, EBIT rose to EUR4.35 billion from EUR3.68 billion, despite a EUR4 million hit from the motorcycles division due to changes in the model launch calender, the company said. Revenue rose to EUR38.46 billion from EUR37.18 billion. Analysts had expected revenue to come in at EUR37.42 billion, according to FactSet estimates.

The full integration of the joint venture, BMW Brilliance Automotive, helped the bottom line, BMW said. Higher sales volumes and positive product mix effects also contributed, though currency effects dragged on the result.

After-tax profit dropped to EUR2.93 billion from EUR3.175 billion a year prior, but beat analyst estimates of EUR2.60 billion, according to FactSet. BMW said that interest-rate hedging transactions resulted in a EUR289 million hit.

"The BMW Group is maintaining its course for profitable growth in a volatile business environment," Chief Executive Officer Oliver Zipse said.

The car maker backed its guidance, which includes an EBIT margin between 9% and 10.5% for the automotive segment. It also expects battery-electric vehicles to comprise 15% of sales this year.

"After a successful third quarter, we expect a positive business development in the fourth quarter," Chief Financial Officer Walter Mertl said. "All segments are on track to meet our goals for the year."

Write to David Sachs at [e-mail]

(END) Dow Jones Newswires

November 03, 2023 06:50 ET (10:50 GMT)

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