BMW says its third quarter profit was 10% higher.
The luxury car manufacturer’s EBIT margin jumped 6.7% in the third quarter.
Deliveries of BMW brand vehicles rose by 9.8%.
BMW (ETR: BMW) said on Wednesday that third quarter profits were up 10% in the fiscal quarter as sales in China jumped after months of stagnation due to the coronavirus pandemic. However, the company warned that the second of the COVID 19 infections in the U.S. and Europe is likely to significantly impact its business in the coming months.
“After a more stable phase of the economic environment in the third quarter, the pandemic is now clearly gaining momentum again. If the pandemic takes an even more serious course and the global economy experiences a noticeable downturn, the risk could be significant, especially on the demand side”.
The company’s shares slipped by almost 3% in pre-market trading on Wednesday. In the course of the year to date, BMW has fallen by around 15% on the stock exchange. Since its low in March, however, it has recovered by about 60% due to the coronavirus pandemic. Learn more about how to invest in the stock market.
BMW increases third quarter EBIT margin by 6.7%.
BMW said its third quarter profit was printed at £2.21 billion, mainly due to annualised growth of 8.6% in sales of luxury cars. Sales of luxury cars climbed to a record high in the last quarter. BMW had recorded a net loss of £207.50 million in the second quarter of the financial year, according to the report published in August.
The EBIT margin (earnings before interest and taxes), according to the car group, rose by 6.7% in the third quarter, compared with the previous year’s figure of 6.6%. In the previous quarter (Q2), the EBIT margin was minus 10.4%. BMW’s competitor, Daimler, also raised its profit forecast for the 2020 fiscal year last month, as higher sales in China helped to recover margins at Mercedes-Benz.
BMW-branded vehicles recorded a 9.8% increase in deliveries.
The German multinational also said on Wednesday that deliveries of BMW brand vehicles in the third quarter rose 9.8% after a massive 31% increase in China. In the United States, on the other hand, deliveries of BMW brand vehicles fell by 15.7%.
For the EBIT margin for the full year, BMW confirmed its target of 0% to 3% on Wednesday. According to the luxury car manufacturer, deliveries of luxury class vehicles and profit before tax are expected to be lower than last year.
At the time of writing this article BMW is valued at 35.46 billion pounds and has a price-earnings ratio of 12.46.