BMW Joins Daimler in Exceeding Estimates on Sales Rebound
(Bloomberg) -- BMW AG reported better-than-expected first-quarter results after a broad car-sales rebound in all major regions, led by China.
Earnings before interest and taxes from automaking operations surged to 2.24 billion euros ($2.7 billion) in the first three months, up from 229 million euros a year earlier, the Munich-based manufacturer said in a statement, citing preliminary figures. Profit also rose on firm vehicle pricing and high demand for used cars, BMW said.
“All figures are indeed above my (and consensus) expectations,” Juergen Pieper, an analyst at Bankhaus Metzler, said Tuesday by email. “BMW’s key drivers are very good sales momentum, positive pricing like for most manufacturers and efficiency gains.”
Carmakers are benefiting from a broadening recovery in demand that started in China. Daimler AG last week reported preliminary first-quarter earnings that were significantly better than expected, citing strong sales in all regions. Global vehicle deliveries for both BMW and Daimler’s Mercedes-Benz surged to a record during the first quarter, led by China as well as demand for newly introduced plug-in hybrid and fully electric vehicles.
While gloom from the pandemic has started to lift, carmakers’ concerns have shifted to supply-chain issues with the global chip shortage continuing to plague production.
BMW has so far managed the turmoil that’s stopped output at factories around the world better than some of its peers. The company increased semiconductor orders last spring after Asian markets recovered, but has warned it still needs to work hard to secure enough parts. Executives have said they’re confident they can avoid production outages this quarter.
BMW also reported group earnings before tax of 3.76 billion euros for the quarter, from 798 million euros a year earlier.
The carmaker expects annual pretax profit to be significantly higher than last year’s, based on a “solid” increase in deliveries, the company said in March. Pretax profit slumped 35% to 4.8 billion euros in 2020 as the pandemic shook the industry.
Returns from automaking are set to more than double this year to between 6% and 8%. BMW said its first-quarter operating margin at the carmaking unit rose to 9.8% from 1.3% a year earlier. BMW will report full first-quarter earnings on May 7.
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