BMW reported sharply higher quarterly earnings and said that economic recovery in its main markets and strong demand for new models like its 5-Series and X-1 meant that its profit would continue to “rise dynamically” this year.
The world’s biggest-selling luxury carmaker reported a second-quarter net profit of €831 million ($1.1 billion), compared with a net profit of €121 million ($160 million) in the same period last year. BMW’s quarterly revenues were €15.35 billion ($20.3 billion), 18 percent higher than a year ago.
The company said that its performance put it on track to meet its target of achieving an earnings before interest and tax margin of 8-10 percent in its core automotive division and a return on equity of at least 18 percent in its financial services segment by 2012.
However, the company said that it was keeping in mind that “some economic risks” could persist in the second half of this year and so its forecast held only if the economic recovery continued and business conditions were not “significantly dampened”.
The Munich-based carmaker raised its earnings guidance in July but its second-quarter numbers were still stronger than most analysts had expected. Analysts polled by Reuters had forecast revenues of €14.7 billion ($19.44 billion), against the €15.3 billion ($20.2 billion) the company achieved.
BMW said that sales of vehicles under its own marque and the Mini and Rolls-Royce brands were 13 percent higher in the first half, at more than 696,000 vehicles.
The company’s core automotive division reported second-quarter ebit of €1.32 billion ($1.74 billion), compared with negative ebit of €31 million ($41 million) a year ago.
BMW’s motorcycles unit reported a 22 percent rise in second-quarter sales and improved first-half earnings in spite of bad business conditions in the segment. While industry sales as a whole are contracting, BMW said that sales of its own motorcycles would increase in 2010.
The carmaker reported an improved pre-tax profit of €379 million ($501 million) for the second quarter in its financial services division, which it attributed to the economic recovery and lower refinancing costs.
BMW’s share price rose by 2 percent in early trading on Tuesday to just under €44 ($58).