BMW Shares Drop After Flagging 2nd Half Challenges

   By Kim Richters 
 

Shares in BMW AG fell on Wednesday after the luxury-car maker backed its full-year margin goal for the auto enterprise however flagged decrease deliveries and softening demand in a troublesome second half.

At 0730 GMT, BMW shares traded 4.9% decrease at EUR77.14.

The German firm mentioned it nonetheless expects the earnings earlier than curiosity and taxes margin for its automotive phase to be between 7% and 9% this yr regardless of chopping the deliveries outlook to barely under final yr’s degree. Gross sales volumes within the second half will not totally make up for misplaced volumes as a consequence of provide bottlenecks within the first six months of the yr however the deliveries decline is anticipated to be partly offset by optimistic results from pricing, combine and the used-car markets, it mentioned.

Consensus estimates are already on the higher finish of the vary for the auto EBIT margin and traders may need anticipated a steerage increase, specifically after BMW peer Mercedes-Benz lifted the goal for its automobiles enterprise final week, RBC Capital Markets analyst Tom Narayan mentioned in a analysis word.

Whereas second-quarter outcomes have been strong, BMW sounded a cautious tone on demand for the yr because it flagged that orders will normalize towards the tip of the yr, Bernstein analysts mentioned in a word. Wanting forward, the auto maker had mentioned it expects enterprise situations to proceed to be troublesome and “ongoing inflation and interest-rate hikes will proceed to form the macroeconomic surroundings within the coming months and impression demand.”

BMW’s quarterly group EBIT declined to EUR3.43 billion from EUR5.01 billion the yr prior. Firm earnings in final yr’s second quarter have been helped by the partial launch of a provision associated to European Union antitrust proceedings whereas earnings this yr have been hit by headwinds from the consolidation of BMW Brilliance Automotive Ltd. Second-quarter income rose 22% to EUR34.77 billion, benefiting from optimistic pricing, product combine and forex translation results.

 

Write to Kim Richters at kim.richters@wsj.com

 

(END) Dow Jones Newswires

August 03, 2022 04:04 ET (08:04 GMT)

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