BMW Tops Q3, Warns Against Inflation Led Business Slowdown

BMW Tops Q3, Warns Against Inflation Led Business Slowdown
  • Bayerische Motoren Werke AG BMWYY German premium carmaker, reported better than expected quarterly net profit thanks to high car prices.
  • However, BMW warned that rising inflation and interest rates would start to weigh on sales in the coming months, Reuters reports.
  • Despite an overall 9.5% drop in sales from the same period last year, the third-quarter revenue jumped 35.3% to €37.18 billion, beating the consensus.
  • Also Read: BMW Makes $1.7B Investment For EV Production In US
  • BMW posted a pretax profit of €4.1 billion, above the consensus.
  • The higher profit comes despite lower sales volumes as supply chain issues, including the semiconductor chip shortage that has curtailed carmakers' global output.
  • BMW said costs were 2.7 billion euros higher than last year, citing higher raw material and energy costs and expenses related to taking majority control of the Chinese joint venture Brilliance Auto Group.
  • BMW warned that rising inflation and interest rates will hit consumer purchasing power in the coming months and that its above-average order books will likely "normalize, especially in Europe."
  • However, finance chief Nicolas Peter said that BMW expects its "positive momentum" to continue in 2023, with full-year sales slightly lower than in 2021, while sales of fully electric vehicles should double.
  • BMW said its full-year operating margin forecast remains within a range of 7-9%.
  • Price Action: BMWYY shares traded at $26.30 in the premarket on the last check Thursday.

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