BMW Shares Drop After Flagging 2nd Half Challenges
August 03 2022 - 3:19AM
Dow Jones News
By Kim Richters
Shares in BMW AG fell on Wednesday after the luxury-car maker
backed its full-year margin target for the auto business but
flagged lower deliveries and softening demand in a difficult second
half.
At 0730 GMT, BMW shares traded 4.9% lower at EUR77.14.
The German company said it still expects the earnings before
interest and taxes margin for its automotive segment to be between
7% and 9% this year despite cutting the deliveries outlook to
slightly below last year's level. Sales volumes in the second half
won't fully make up for lost volumes due to supply bottlenecks in
the first six months of the year but the deliveries decline is
expected to be partly offset by positive effects from pricing, mix
and the used-car markets, it said.
Consensus estimates are already at the upper end of the range
for the auto EBIT margin and investors might have expected a
guidance raise, in particular after BMW peer Mercedes-Benz lifted
the target for its cars business last week, RBC Capital Markets
analyst Tom Narayan said in a research note.
While second-quarter results were solid, BMW sounded a cautious
tone on demand for the year as it flagged that orders will
normalize toward the end of the year, Bernstein analysts said in a
note. Looking ahead, the auto maker had said it expects business
conditions to continue to be difficult and "ongoing inflation and
interest-rate hikes will continue to shape the macroeconomic
environment in the coming months and impact demand."
BMW's quarterly group EBIT declined to EUR3.43 billion from
EUR5.01 billion the year prior. Company earnings in last year's
second quarter were helped by the partial release of a provision
related to European Union antitrust proceedings while earnings this
year were hit by headwinds from the consolidation of BMW Brilliance
Automotive Ltd. Second-quarter revenue rose 22% to EUR34.77
billion, benefiting from positive pricing, product mix and currency
translation effects.
Write to Kim Richters at kim.richters@wsj.com
(END) Dow Jones Newswires
August 03, 2022 04:04 ET (08:04 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
Bayerische Motoren Werke (TG:BMW)
Historical Stock Chart
From Apr 2024 to May 2024
Bayerische Motoren Werke (TG:BMW)
Historical Stock Chart
From May 2023 to May 2024