The largest premium automaker in the world released some preliminary financial results recently after a supervisory board meeting, with the Munich-based carmaker negatively surprising analysts and investors.
The company’s shares took a 2 percentage point hit after the automaker announced its BMW car unit had the lowest profitability in the past five years in the last quarter of 2014 – with full results expected to be published on March 18. The preliminary statement showed earnings before interest and tax (EBIT) jumped 14 percent to 9.1 billion euros ($9.7 billion) in 2014, which is above average forecasts of analysts. But the margin on automotive earnings before interest and tax (EBIT) dropped to 8.2 percent in the fourth quarter of 2014 after standing in at 9.2 percent for the period a year before.
While analysts contended that the operating margin at its automotive division came in weaker than expected during the last three months of the year, for the full-year period the group’s earnings soared thanks to the record car sales. Naturally, for the entire period of 2014 the automaker’s car division margin stood in at 9.6 percent, at the upper part of its forecasted eight to ten percent range. BMW also released its proposal for 2014’s dividend – which at 2.90 euros was higher than 2013’s figure of 2.60 euros – but again some analysts were disappointed, expecting a dividend proposal to soar past the 3 euro margin, for a payout ratio above 30 percent. BMW also announced that sales for its namesake brand stood at 1.81 million units in 2014, once more surpassing Audi and Mercedes-Benz figures of 1.74 million and 1.65 million vehicles, respectively.