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NewsBMW third-quarter hit by upfront expenditure for electric car development

01:15  08 november  2018
01:15  08 november  2018 Source:   reuters.com

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FRANKFURT (Reuters) – German carmaker BMW ’s third - quarter operating profit fell 27 percent to 1.75 billion euros on Wednesday, below Last month BMW warned its pretax profit would fall this year, against earlier expectations for a flat outcome, and cut its profit margin guidance for cars

BMW made provisions of 679 million euros for vehicle recalls in the third quarter . “Compared with 2017, additional upfront expenditure of around 1 billion euros for the mobility of the future and a high three-digit million euro negative impact from exchange-rate and raw materials price developments

BMW third-quarter hit by upfront expenditure for electric car development© Reuters/REGIS DUVIGNAU Paris Auto Show German carmaker BMW on Wednesday reported a 27 percent drop in third-quarter operating profit to 1.75 billion euros ($2.00 billion), missing analyst expectations amid currency headwinds and higher research and development expenses.

Analysts in a Reuters poll had on average expected earnings before interest and taxes (EBIT) to come to 1.795 billion euros.

BMW said that despite a slight rise in deliveries of luxury cars, its operating return on sales for the automotive division narrowed to 4.4 percent from 8.6 percent a year earlier, well below its targeted range of 8 to 10 percent.

Earnings were hit by higher raw material prices, currency effects, higher provisions for goodwill and warranty measures, tariffs between China and the United States and a price war in Europe, the carmaker said.

Last month BMW warned its pretax profit would fall this year, against earlier expectations for a flat outcome, and cut its profit margin guidance for cars, blaming intense price competition.

($1 = 0.8747 euros)

(Reporting by Edward Taylor, editing by Riham Alkousaa)

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