May 4, 2018 / 6:02 AM / 2 years ago

Forex headwinds take shine off record BMW deliveries in first quarter

FRANKFURT (Reuters) - Germany’s BMW (BMWG.DE) posted a 3 percent drop in first-quarter operating profit as unfavorable exchange rate effects weighed on revenues and earnings, even as the carmaker posted higher margins and sales volume at its luxury cars business.

The BMW booth displays the company logo at the North American International Auto Show in Detroit, Michigan, U.S. January 16, 2018. REUTERS/Jonathan Ernst

Group earnings before interest and taxes (EBIT) fell to 2.73 billion euros ($3.27 billion) from 2.82 billion euros in the year-earlier period, but the results were still welcomed by analysts at Jefferies.

“A nice and unusual surprise from BMW with a beat on EBIT,” Philippe Houchois said in a note on Friday.

Revenues fell 5.1 percent to 22.7 billion euros in the quarter, held back by currency effects, BMW said. Excluding those effects, revenues would have been 0.7 percent lower.

Export-driven companies like automotive supplier Continental (CONG.DE) and Daimler (DAIGn.DE) have warned that a weaker dollar will dampen growth going forward even as they post record sales.

BMW said deliveries of its luxury cars had increased 2.8 percent in the three months through March, to 517,447 vehicles, boosted by sales of the new 5-series and the X1 offroader. At sister brand Mini, sales rose 4 percent in the quarter.

BMW aims for full-year 2018 sales and revenues at its automotive segment to reach record levels, helping it achieve an operating margin of 8 to 10 percent at the business.

In the first quarter, the automotive segment posted a margin of 9.7 percent, up from 9.4 percent a year earlier.

BMW affirmed its guidance for 2018 group pre-tax profit at least at last year’s level.

Regulatory approval for the planned merger of its DriveNow car-sharing business and rival Car2Go however will lead to a one-off valuation effect, which will result in slightly higher group pre-tax profit.

($1 = 0.8347 euros)

Editing by Maria Sheahan

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