BMW’s 3rd quarter profit slips on higher taxes, model changeovers

Luxury automaker BMW AG said Thursday that its third-quarter profit slipped 0.7 per cent, missing market expectations, because it had to pay higher taxes and retooled its lineup of car models.

However, the company said it was optimistic about achieving its goal of a pretax profit of US$5.1 billion in 2006, along with record sales.

Munich-based BMW earned $577 million in the July-September period, down from $580 million a year earlier. Analysts polled by Dow Jones Newswires had expected a profit of $600 million.

Sales fell 1.4 per cent to $14.75 billion from $14.96 billion.

The company’s pretax profit was up 9.4 per cent to $918.9 million from $840 million, helped in part by a one-time gain from a settlement on an exchangeable bond on shares in Rolls-Royce PLC.

“We are right on track for achieving a record pretax profit of $5.1 billion as well as a new record in retail volume for the current year,” BMW Chief Executive Norbert Reithofer said in a statement.

Shares of BMW were down less than 1 per cent to $57.61 in Frankfurt trading as analysts largely agreed that BMW’s results could have been better.

“BMW’s third-quarter earnings were in line at the operating level, with a modest improvement in operating profit and strong margins, but a weaker automotive result than expected,” said Stephen Cheetham, a European autos senior research analyst with Sanford C. Bernstein Ltd. in London.

He added that sales in the quarter were down because of some weakening demand for the company’s 6- and 7-series lineup, along with a dip in the X5, its sport-utility vehicle.

“Mini sales were also down 10.5 per cent, again because of the transition to the new model,” Cheetham said. “Group unit sales are up 3.3 per cent year-to-date, but the company still has to prove it can re-ignite the strong sales growth seen earlier this year.”

Third-quarter deliveries were down 5.5 per cent on the year at 323,064 cars, but year-to-date deliveries are still up 3.3 per cent compared with the same period in 2005, at 1,021,534 cars.

The company is preparing to launch a revamped version of its high-margin X5 SUV and several derivatives of other model lines. The automaker, which has not specified a sales target for this year, hopes to sell 1.4 million cars worldwide in 2007 and 1.6 million cars by 2010.

« BMW Adds Real Time Traffic Information to its Navigation System | BMW plans to increase yearly U.S. production by nearly 43by 2010 »

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Orlando Motors Sport üzerinde şu anda okumakta olduğunuz 'BMW’s 3rd quarter profit slips on higher taxes, model changeovers' isimli yazı 18 Mar 2008 tarihinde, saat: 14:37 'de admin tarafından gönderilmiş.

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