Time to report auto sales dips and increases…
As for BMW, its third-quarter net profit increased 78%. The good news was triggered by increased sales, and raised its sales outlook for the rest of 2007 on Tuesday.
The Munich-based luxury automaker earned 803 million euros ($1.2 billion) in the July-September period, compared with 452 million euros a year earlier, beating the 605 million-euro profit ($876.5 million) that analysts polled by Dow Jones Newswires had forecast, reported Associated Press. Sales at BMW, which also makes the popular Mini, the Rolls-Royce and motorcycles, soared 19% to 13.78 billion euros ($19.96 billion).
Despite some market worries about the falling U.S. dollar, BMW said it was "well on its way toward achieving its earnings and sales volume targets for the full year." "The BMW Group will focus its attention on profitability and increasing value over the long term," said Chief Executive Norbert Reithofer.
"BMW's (third-quarter) numbers mark a slightly better performance after a very disappointing year so far, with at least some of the top-line strength feeding through into earnings growth," said auto analyst Stephen Cheetham at Sanford C. Bernstein Ltd. "However, apart from higher net income due to lower taxes, the numbers came in below our estimates, and do little to dispel investor fears of the company's continued exposure to a weaker U.S. dollar."
The euro currency hit another new high of $1.4571 on Tuesday, but the automaker said it did not expect the negative impact to be bigger than the 666 million euros it posted in 2006. "All of the main currencies are fully hedged for the business year 2007," BMW said, adding it had been "confronted with higher purchase prices for steel, precious metals and other materials. The additional cost is likely to be on a similar scale to the previous year's level of 178 million euros ($257.89 million)."
But Cheetham said markets would likely take a "wait and see approach" to the company's improvement plans, and BMW shares fell 3.3% to close at 43.31 euros ($63) in Frankfurt.
In terms of sales, BMW noted the strong demand in all of its markets, including the United States, its largest market, and it expects to sell more than 1.4 million cars by the end of the year. Reithofer said BMW hopes to sell more than 1.8 million vehicles a year by 2012.
According to the automaker’s third-quarter report, sales increased 13% to 364,564 vehicles from 323,064 last year, while nine-month sales rose 7.2 % to 1.09 million vehicles from 1.02 million in the same period in 2006.
Chief Financial Officer Michael Ganal said he expects the company to post a strong fourth quarter, and added that the earnings impact from the rising euro is likely to ease through the second half of this year compared to the first six months.
The maker of BMW cylinder head introduced its new 6-Series Coupe and convertible and is developing its new Mini Clubman that is expected to go on sale worldwide later this month. Product launches are the company’s effort to boost its standing in the competitive global market.
As for BMW, its third-quarter net profit increased 78%. The good news was triggered by increased sales, and raised its sales outlook for the rest of 2007 on Tuesday.
The Munich-based luxury automaker earned 803 million euros ($1.2 billion) in the July-September period, compared with 452 million euros a year earlier, beating the 605 million-euro profit ($876.5 million) that analysts polled by Dow Jones Newswires had forecast, reported Associated Press. Sales at BMW, which also makes the popular Mini, the Rolls-Royce and motorcycles, soared 19% to 13.78 billion euros ($19.96 billion).
Despite some market worries about the falling U.S. dollar, BMW said it was "well on its way toward achieving its earnings and sales volume targets for the full year." "The BMW Group will focus its attention on profitability and increasing value over the long term," said Chief Executive Norbert Reithofer.
"BMW's (third-quarter) numbers mark a slightly better performance after a very disappointing year so far, with at least some of the top-line strength feeding through into earnings growth," said auto analyst Stephen Cheetham at Sanford C. Bernstein Ltd. "However, apart from higher net income due to lower taxes, the numbers came in below our estimates, and do little to dispel investor fears of the company's continued exposure to a weaker U.S. dollar."
The euro currency hit another new high of $1.4571 on Tuesday, but the automaker said it did not expect the negative impact to be bigger than the 666 million euros it posted in 2006. "All of the main currencies are fully hedged for the business year 2007," BMW said, adding it had been "confronted with higher purchase prices for steel, precious metals and other materials. The additional cost is likely to be on a similar scale to the previous year's level of 178 million euros ($257.89 million)."
But Cheetham said markets would likely take a "wait and see approach" to the company's improvement plans, and BMW shares fell 3.3% to close at 43.31 euros ($63) in Frankfurt.
In terms of sales, BMW noted the strong demand in all of its markets, including the United States, its largest market, and it expects to sell more than 1.4 million cars by the end of the year. Reithofer said BMW hopes to sell more than 1.8 million vehicles a year by 2012.
According to the automaker’s third-quarter report, sales increased 13% to 364,564 vehicles from 323,064 last year, while nine-month sales rose 7.2 % to 1.09 million vehicles from 1.02 million in the same period in 2006.
Chief Financial Officer Michael Ganal said he expects the company to post a strong fourth quarter, and added that the earnings impact from the rising euro is likely to ease through the second half of this year compared to the first six months.
The maker of BMW cylinder head introduced its new 6-Series Coupe and convertible and is developing its new Mini Clubman that is expected to go on sale worldwide later this month. Product launches are the company’s effort to boost its standing in the competitive global market.