BMW’s net earnings jumped more than 27% during the second quarter, and the German maker confirmed its earlier forecast of a big jump in sales and profits for all of 2014.
The largest of the luxury car manufacturers, BMW earned 1.77 billion Euros for the April-June period, or $2.38 billion, up from 1.39 billion Euros a year ago. The automaker sold 5.3% more vehicles through its BMW, Rolls-Royce and Mini brands, a total of 533,187 cars and crossovers.
But revenues didn’t quite keep pace, climbing a more modest 1.8%, to 19.9 billion Euros. The strong Euro didn’t help. And BMW has been ramping up spending in a market that is demanding more high-tech features, and solutions to demands for better fuel economy and lower emissions, it said.
BMW’s announcement came shortly after Toyota revealed it had delivered a record $5.7 billion profit for the April-June quarter, the first in its fiscal year, and a nearly 5% year-over-year increase. Japanese makers have benefited from a reverse of the situation facing their European rivals, a weak yen that has helped inflate earnings.
(Toyota delivers record earnings for April-June quarter. Click Here for more.)
But the jump in sales of key products helped BMW offset its exchange rate woes. That includes recently updated products, such as the BMW 5-Series and X5, as well as various Rolls-Royce models.
The maker did see a slide in sales at its Mini brand, however, but the British-based maker had anticipated some losses as it began a critical model changeover. It recently launched an all-new version of its hatchback line, and the new, and larger platform it uses will be shared by a number of other Mini models over the next several years.
(Click Here for details on Rolls-Royce’s new open-top tourer.)
BMW’s second-quarter performance exceeded industry expectations. But what may generate the most positive buzz is the 11.7% profit margin it turned in on its automotive business, up from a still strong 9.6% a year ago. That was well ahead of the 7.9% margins for the quarter at Daimler AG’s Mercedes-Benz unit, and the 10% margins reported by Audi, the luxury arm of Volkswagen AG for the first half of the year.
But BMW is only expecting an 8% to 10% operating profit margin for the full year, it said.
(To see about BMW’s plans to build vehicles in Mexico, Click Here.)
The maker, nonetheless, is anticipating strong sales and earnings for all of 2014.
“After our record sales volume performance in the first half of the year, we are now targeting a significant increase in the number of vehicles delivered to customers in the current year and hence a new sales record of over two million vehicles,” said BMW Chief Executive Norbert Reithofer.
