Earnings Preview: BMW 3Q results

By GEORGE FREY

posted: 26 DAYS 4 HOURS AGO

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FRANKFURT -German carmaker Bayerische Motoren Werke AG reports earnings for its third quarter Nov. 3. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: BMW, based in Munich, is the world's biggest luxury carmaker by revenue, and one of the worlds leading motorcycle brands. Besides its namesake cars and motorcycles, the company builds Mini and Rolls Royce brand cars.

The company is expected to report lower net income and revenue for the July-September period as car companies have seen sales slip in the downturn.

Car sales in September began to show signs of recovery. BMW said earlier this month it sold almost 1,000 more cars in September than it had for the month in 2008. Provided there are no economic setbacks, BMW said it should continue to make sales gains for the rest of the year.

BY THE NUMBERS: Three analysts polled by Thomson Reuters expect BMW to report net income of euro146 million ($216.1 million) for the quarter. Meanwhile, nine analysts expect the company to report revenue of nearly euro12 billion in the July-September period.

In the third quarter of 2008, BMW reported a net income of euro298 million on revenue of euro12.6 billion.

ANALYST TAKE: Autos analyst Tim Urquhart at IHS Global Insight in London said he thinks the company is on top of things and has done a good job at "cutting their cloth" and reacting to the lower demand of recent months.

He said the company's strategy of developing environmentally friendly power trains while keeping with luxury and sporty traditions is also smart. Quitting the Formula One racing circuit should also save the company around euro200 million a year, he said. BMW said in late July it would leave the sport and that the team's funding would be routed to sustainability projects.

WHAT'S AHEAD: Observers will continue to look at the severity and duration of the economic downturn which has cut sharply into nearly all product sales in Germany — the world's largest exporter.

Also, observers will be looking forward to the group's new models including a Mini coupe and a new Rolls Royce model called the Ghost.

The company has said the order book on the new Ghost — which is a step below the top of the line Phantom — is developing well. It hopes to start selling the new car next year.

STOCK PERFORMANCE: Shares of BMW were trading at euro33.55 Oct. 30, 8 percent below their 52-week high of euro36.45 earlier in the month.

The stock's 52-week low of euro17.29 was set in the first quarter 2009.

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On the Net:

http://www.bmw.com

2009-10-30 14:17:49