BMW expects significant earnings growth despite Ukraine war

Shares of BMW AG (ETR: BMW) are up 2.5% on Wednesday after the luxury cars manufacturer expressed confidence that its earnings will rise significantly this year, despite the ongoing war in Ukraine.

CEO Oliver Zipse’s remarks on CNBC

BMW cited consolidation of BMW Brilliance Automotive – its Chinese joint venture for the upbeat guidance. The automaker, however, doesn’t expect deliveries to grow YoY due to the geopolitical tensions. In a CNBC interview, CEO Oliver Zipse said:

BMW now forecasts EBIT margin for its car business to stand between 7.0% and 9.0% this year, down from 10.3% in 2021.

BMW sees €7.0 billion in FCF from automotive

According to BMW, its free cash flow from the automotive segment will likely hit €7.0 billion at least in 2022. Quantifying the short-term impact from the Ukraine war, however, is rather challenging, added CEO Zipse.

BMW reported its financial results for 2021 earlier in March. The stock that trades at a PE multiple of 4.30 is down 15% for the year.