Slowing American economy hits BMW
Bayerische Motoren Werke AG, the world's largest maker of luxury cars, said its Q1 profit fell 17% after a slowing US economy hurt prices in the world's biggest automobile market.
According to Bloomberg News, the company's revenue advanced 11% to €13.3 billion.
BMW booked a €236 million charge because of bad debts and lower values on cars it sells in the United States after leases expire. Chief Executive Officer Norbert Reithofer said pretax profit will still rise this year as the company boosts sales to eastern Europe and Asia and lures buyers with the X6 crossover and upgrades of the X5 SUV and Mini car.
“The revenue side of things was actually better than we expected,” said Michael Tyndall, an analyst at Nomura Securities in London with a “sell” rating on the shares.
“Some in the market might think that they've taken the hit and now we can move on. If that's your thinking then maybe BMW is a good place to be, given how bad things are.”
BMW, which had said on April 24 it would book the US charge, rose as much as €1.31, or 3.7%, to €36.48 and was trading up 1.6% at €35.72 in Frankfurt. The stock has lost 16% this year, reducing the company's value to €23 billion.
Analysts surveyed by Bloomberg had predicted net revenues of €603 million, prior to announcement of the charge, on sales they said would rise 5.6% to €12.6 billion. (Xinhua)
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