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BMW results higher than analysts expected

Rise in demand in China drives recovery

Global deliveries for both BMW and Daimler’s Mercedes-Benz cars unit surged to a record during the first quarter, led by China as well as demand for newly introduced plug-in hybrid and fully electric vehicles.

Tue Apr 20 2021 - 17:35

BMW reported first-quarter results that were higher than analysts expected after a rebound in demand across all regions, led by China.

Earnings before interest and taxes from automaking operations rose to €2.24 billion in the first three months of the year, up from €229 million a year earlier, the Munich-based manufacturer said in a statement detailing preliminary earnings.

The result was higher than analysts’ predictions, the manufacturer said without specifying.

Carmakers are benefiting from a broadening recovery in demand that started in China. Daimler last week reported preliminary first-quarter earnings that were significantly better than expected, citing strong sales in all regions.

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Global deliveries for both BMW and Daimler's Mercedes-Benz cars unit surged to a record during the first quarter, led by China as well as demand for newly introduced plug-in hybrid and fully electric vehicles.

While gloom from the pandemic has started to lift, carmakers’ concerns have shifted to supply chain issues with the global chip shortage continuing to plague production.

Turmoil

BMW has so far swerved the turmoil that’s stopped output at plants around the world. The company previously said it increased semiconductor orders last spring after Asian markets recovered but has said it still needs to work hard at securing enough of the parts. Executives have said they’re confident to avoid production outages in the second quarter.

BMW also reported group earnings before tax of €3.76 billion for the quarter, from 4798 million a year earlier.

The carmaker expects annual pre-tax profit to be significantly higher, based on a “solid” rise in deliveries, the company said in March. Pretax profit slumped 35 per cent to €4.8 billion last year as the pandemic shook the industry.

Returns from automaking are set to more than double this year to between 6 per cent and 8 per cent. BMW said its first-quarter operating margin in the carmaking unit rose to 9.8 per cent from 1.3 per cent. BMW will report full first-quarter earnings on May 7th. – Bloomberg

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