The world’s largest premium automaker, Germany’s BMW Ag, reported its financial earnings after the first three months of the year, with the profit beating analyst estimates thanks to increased sales of the company’s X line of models across the US and at home in Europe.
According to a recent statement from the Munich-based company, earnings before interest and taxes – or EBIT – jumped 21 percent from the same period last year to a total of 2.52 billion euros ($2.83 billion), above the 2.2 billion average estimate of analysts, compiled by Bloomberg. Revenue was also healthy, up 15 percent from the first quarter of last year, reaching 20.9 billion euros. BMW has managed, just like German rivals Volkswagen AG and Daimler Ag, to soar above analyst forecasts for the first quarter period thanks to increased consumer confidence that has spurred luxury sales. European carmakers are also seeing the long-awaited regional demand turnaround, after a six-year slump in demand that took sales to a two-decade low figure. They are further assisted by the recent currency swing, as the euro has lost some of its value against the dollar, lifting overseas revenue. “Unchanged profitability at the automotive unit indicates BMW’s core business is growing slowly. While there’s growth, it’s not as fast as at Daimler,” commented an analyst, putting some of the financial increase on the back of the currency tailwind.
Additionally, the German automaker said first quarter EBIT soared from 11.5 percent of revenue to 12.1 percent – though the earnings margin was level at 9.5 percent at the core automotive unit. Meanwhile, Daimler’s Mercedes-Benz managed to increase its earnings margins, while close following second placed Audi has lost some of its profitability in its bid to catch up to their dire rivals.