admin
FRANKFURT. — Bayerische Motoren Werke AG, the world’s biggest maker of luxury vehicles, reported a decline in third-quarter profit as spending on expansion offset stronger demand for the 3-Series sedan. Earnings before interest and taxes fell 3,7 percent to 1,93 billion euros, the Munich-based company said yesterday in a statement. Revenue slipped 0,4 percent to 18,8 billion euros, even as deliveries rose 11 percent.
The maker of BMW, Mini and Rolls-Royce vehicles failed to keep pace with earnings gains at Volkswagen AG and Daimler AG. BMW is spending on the battery-powered i3 city car and the plug-in hybrid i8 sports car to introduce its eco-friendly “i” sub-brand.
The expansion is part of the company’s effort to maintain its edge over Audi and Mercedes-Benz, which have both vowed to surpass BMW in sales by the end of the decade.
“Once BMW i start-up costs start diminishing, focus will return to growth,” Arndt Ellinghorst, a London-based analyst with International Strategy and Investment Group, said yesterday.
BMW fell as much as 4,2 percent to 80,13 euros and was down 3,9 percent at 9:26am in Frankfurt trading. The stock has gained 10 percent this year, valuing the company at 51,6 billion euros.
BMW maintained a forecast of 2013 pretax profit “on a similar level” to last year’s 7,82 billion euros as investment offsets delivery growth. Nine-month pretax profit slipped 0,3 percent to 6,02 billion euros.
The manufacturer’s auto-division reported third-quarter Ebit of 1,55 billion euros, or 9 percent of sales, falling from 9,6 percent a year ago.
That compares with margins of 9,4 percent in the period at Audi and 7,3 percent at Mercedes. BMW reiterated today that the full-year Ebit margin at the car-making unit will be in a range of 8 percent to 10 percent.
BMW’s earnings “have developed positively despite the higher level of expenditure on new technologies and a challenging market environment in Europe”, Chief Executive Officer Norbert Reithofer said in the statement.
BMW is under increasing pressure to keep ahead of German competitors. Daimler’s Mercedes-Benz Cars division, which also includes the Smart city-car brand, reported a 23 percent surge in third-quarter Ebit. Operating profit at Volkswagen jumped 20 percent as earnings from the Porsche sports-car brand partly offset investment to expand Audi. — Bloomberg.
Online Reporter