BMW says profit came in 10% higher in the fiscal third quarter
- BMW says profit came in 10% higher in the third quarter.
- The luxury carmaker's EBIT margin jumps 6.7% in fiscal Q3.
- BMW-branded vehicles saw a 9.8% increase in deliveries.
BMW (ETR: BMW) said on Wednesday that its profit in the fiscal third quarter came in 10% higher as sales jumped in China after months of halt due to the Coronavirus pandemic. The company, however, warned that the second of COVID-19 infections in the U.S. and Europe is likely to significantly hit its business in the upcoming months.
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“After a more stable phase in the economic environment in the third quarter, the pandemic is now clearly regaining momentum. If the pandemic takes an even more serious course and the global economy experience a perceptible downturn, the risk exposure could be considerable, particularly on the demand side.”
Shares of the company slid close to 3% in premarket trading on Wednesday. On a year to date basis, BMW is now about 15% down in the stock market. But it has recovered roughly 60% since its low in March, due to the Coronavirus pandemic. Learn more about how to invest in the stock market.
BMW’s EBIT margin jumps 6.7% in the third quarter
BMW said that its profit in the third quarter printed at £2.21 billion, attributed primarily to an 8.6% annualised growth in sales of luxury cars. Luxury car sales climbed to a record high in the recent quarter. BMW had swung to £207.50 million of net loss in the fiscal second quarter, as per the report published in August.
EBIT (earnings before interest and taxes) margin, the automotive company said, jumped 6.7% in the third quarter versus the year-ago figure of 6.6%. EBIT margin in the prior quarter (Q2) stood at minus 10.4%. BMW’s competitor, Daimler also raised its guidance for profit in fiscal 2020 last month, as higher sales in China helped recover margins at Mercedes-Benz.
BMW-branded vehicles saw a 9.8% increase in deliveries
The German multinational also said on Wednesday that deliveries of BMW-branded vehicles in Q3 saw a 9.8% increase, on the back of a massive 31% jump in China. In the United States, on the contrary, BMW-branded vehicles posted a 15.7% decline in deliveries.
For the full-year EBIT margin, BMW reiterated its target of 0% to 3% on Wednesday. According to the luxury carmaker, high-end vehicle deliveries and pre-tax profit is expected to come in lower than last year.
At the time of writing, BMW is valued at £35.46 billion and has a price to earnings ratio of 12.46.