BMW Warns Of Pandemic Dangers As Third-quarter Revenue Rebounds

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FRANKFURT: BMW’s third-quarter revenue rose virtually 10% because of Chinese language demand for luxurious vehicles, however the German automaker warned a brand new wave of coronavirus infections sweeping Europe and the U.s. posed a “appreciable” danger to its enterprise.

Gross sales of luxurious vehicles reached a brand new document within the quarter, however the cautious outlook despatched BMW shares decrease on Wednesday.

“After a extra secure section within the financial surroundings within the third quarter, the pandemic is now clearly regaining momentum,” BMW mentioned.

“If the pandemic takes an much more critical course and the worldwide financial system experiences a perceptible downturn, the chance publicity may very well be appreciable, notably on the demand aspect.”

BMW shares dropped 3.1% in early commerce, underperforming Germany’s blue-chip DAX index.

Like rival Mercedes, BMW’s quarterly pretax revenue recovered within the third quarter, rising 9.6% to 2.46 billion euros ($2.87 billion), lifted by an 8.6% improve in deliveries of luxurious vehicles.

The automotive EBIT (earnings earlier than curiosity and tax) margin rebounded to six.7%, from minus 10.4% within the second quarter and 6.6% a yr earlier.

“BMW beat totally on earnings high quality with auto margin recovering to yr in the past stage,” Jefferies analyst Philippe Houchois mentioned, pointing to prudent value administration, decrease R&D spending and a rebound in demand from China.

Deliveries of BMW-branded automobiles jumped of 9.8% in the course of the quarter, primarily because of a 31% spike in China, which helped offset a 15.7% drop in demand in the USA, the place the pandemic has hit gross sales.

BMW reiterated it anticipated to realize an automotive EBIT margin of 0%-3% this yr.

Regardless of a restoration in demand in some markets, total deliveries of high-end automobiles in addition to group pretax revenue are anticipated to be considerably decrease than final yr, it mentioned.

($1 = 0.8581 euros)

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