CHAIRMAN: DR. KHALID BIN THANI AL THANI
EDITOR-IN-CHIEF: DR. KHALID MUBARAK AL-SHAFI

Business / World Business

BMW earnings top estimates on cost cutting, upscale car demand

Published: 06 Nov 2019 - 04:39 pm | Last Updated: 01 Nov 2021 - 09:13 am
An employee holds a BMW logo on the production line of the BMW C evolution electric maxi-scooter at the BMW Berlin motorcycle plant, February 23, 2015. Reuters / Fabrizio Bensch

An employee holds a BMW logo on the production line of the BMW C evolution electric maxi-scooter at the BMW Berlin motorcycle plant, February 23, 2015. Reuters / Fabrizio Bensch

Oliver Sachgau I Bloomberg

BMW AG’s operating profit jumped 33% in the third quarter as sales of high-margin models and a cost-cutting program offset the pressures of investing in electric cars.

During Chief Executive Officer Oliver Zipse’s first quarter in charge, earnings before interest and taxes increased to 2.29 billion euros ($2.54 billion), the company said in a statement Wednesday. Analysts had expected 2.12 billion euros.

BMW’s automotive Ebit margin widened to 6.6%, compared to 4.4% in the same period last year.

Key insights

BMW’s revenue rose 7.9% to 26.7 billion euros in the face of a shrinking market. The Munich-based carmaker sold 1.7% more vehicles through September than in the year before, while overall auto sales across Europe fell 1.6% in the same period.

The company has been relying on the sale of high-end cars, including its new full-sized X7 sport utility vehicle, to pay for the shift to electric cars.

The push into battery-powered vehicles is picking up pace with the start next year of tighter environmental regulations that would impose tough fines on carmakers whose average emissions exceed 95 grams carbon-dioxide per car per kilometer. BMW has said it’s committed to meeting the targets.

Carmakers are looking to cut costs as the auto industry shows no sign of meaningful recovery. Ford Motor Co. cut its full-year forecast in October, while Volkswagen AG’s CFO Frank Witter last week warned the next two years will be tough.

Get More

BMW stuck to its full-year forecast of a slight increase in car deliveries and an automotive profit margin between 4.5% and 6.5%, including charges.

BMW reaffirmed that it expects more than 12 billion euros in savings from its ongoing cost-cutting program.

The company is hosting a media call at 10 a.m. local time and an analyst presentation at 2 p.m.