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BMW Posts Record Car Profit as 5-Series Beats Audi, Mercedes
BMW Posts Record Car Profit as 5-Series Beats Audi, Mercedes (1)
2011-05-04 10:49:59.263 GMT
By Chris Reiter
May 4 (Bloomberg) -- Bayerische Motoren Werke AG, the
world's largest maker of luxury vehicles, earned more money per
car than ever before in its 95-year history, lifted by surging
deliveries of the revamped 5-Series sedan.
The automotive unit's first-quarter operating margin
climbed to 11.9 percent from 2.7 percent a year earlier, the
Munich-based manufacturer said today. BMW made a profit of 4,462
euros per car on average, compared with 4,145 euros at Daimler
AG's Mercedes-Benz and 2,981 euros at Volkswagen AG's Audi.
BMW "seems like they're playing in a different league at
this stage," said Arndt Ellinghorst, a London-based Credit
Suisse analyst with an "outperform" rating on the stock.
Chief Executive Officer Norbert Reithofer is pushing BMW to
boost profitability to guard the company's independence and fend
off Audi, which aims to overtake BMW as the luxury-car leader by
2015. The maker of BMW, Mini and Rolls-Royce cars has exited the
Formula One race circuit, cut staff and reduced spending on
components and supplies by more than 4 billion euros since 2008.
BMW's earnings before interest and taxes more than
quadrupled to 1.9 billion euros ($2.81 billion), beating the
1.54 billion-euro average estimate of 14 analysts surveyed by
Bloomberg. Sales of BMW's 5-Series more than doubled to 85,400
vehicles and the X3's deliveries surged 94 percent to 22,700
SUVs, fueling a 21 percent advance in demand to 382,800 autos in
the first quarter.
"It's a fantastic result," Jose Asumendi, a London-based
Royal Bank of Scotland analyst who recommends buying the shares,
said of BMW's earnings. "It's all driven by the autos. The
flagship models are delivering."
BMW rose as much as 1.63 euros, or 2.6 percent, to 65.00
euros and was up 0.1 percent to 63.42 euros as of 12:47 p.m. in
Frankfurt trading. The shares have climbed 77 percent in the
past 12 months, valuing the company at 40.3 billion euros. The
stock pared gains today after the automaker said costs will
Second-half growth will likely slow because of tougher
year-earlier comparisons, while introductions of models like an
overhauled version of the 1-Series compact and a new Mini coupe
will add expenses, Chief Financial Officer Friedrich Eichiner
said today on a conference call with reporters. BMW stuck to its
target for an auto Ebit margin of more than 8 percent this year.
"Our environment is volatile," said Reithofer, adding
that the carmaker will likely avoid significant disruptions
stemming from the March earthquake in Japan. BMW's sales rose
about 17 percent to 136,000 vehicles in April, he said.
China's growing economy and a rebound in spending in the
U.S. are fueling record demand for vehicles from the three
German luxury-car makers. VW reported last week first-quarter
Ebit more than tripled because of demand for Audi in China.
Daimler AG's operating profit rose 71 percent led by sales of
the Mercedes S-Class. Audi had a 10.6 percent operating profit
as a percentage of sales in the first quarter, while Daimler
AG's Mercedes was 9.3 percent.
BMW's first-quarter net income almost quadrupled to 1.21
billion euros. Revenue increased 29 percent to 16 billion euros.
BMW expects to sell "well over" 1.5 million vehicles this year,
surpassing the 2010 level of 1.46 million.
"We have generated record earnings and sold more cars in a
first quarter than ever before," Reithofer said. "The BMW
group is well on its way towards achieving new sales volume and
earnings records for the full year."
BMW is expanding its lineup to reach a goal of selling more
than 2 million cars and SUVs annually by 2020. It has created
the "i" electric-car sub-brand, which will start in 2013 with
the i3, a battery-powered city car. BMW is also planning the i8,
a hybrid supercar based on the Vision Efficient Dynamics
prototype. The sub-brand's models will have frames built largely
of carbon fiber and display a blue ring around the BMW logo.
The manufacturer is also pushing into transport-related
services and experimenting with short-term rentals as it seeks
to appeal to consumers more interested in gadgets like Apple
Inc.'s iPhone. The company started a $100 million venture-
capital unit and invested in the MyCityWay guide service.
For Related News and Information:
Relative valuations for BMW: BMW GY
BMW earnings graph: BMW GY
Luxury-auto stories: TNI AUT LUX
Top transport stories: TRNT
--Editors: Chad Thomas, Heather Harris
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