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BMW Stock Down On Weak Q3 Profit; Confirms FY18 Outlook


Shares of BMW Group (BMW.L) declined around 2 percent in German trading after the auto giant reported Wednesday weak profit in its third quarter, despite growth in revenues. Further, the company confirmed its fiscal 2018 forecast for lower profit and automotive revenues.

The company noted that the industry-wide shift to the new WLTP test cycle has resulted in significant supply distortions in Europe and unexpectedly intense competition. Unlike many of its competitors, BMW implemented the requirements of the WLTP regulations at an early stage. The company added that several additional factors further restricted business performance in the third quarter.

Further, the BMW Group confirmed its current outlook for fiscal 2018. Group profit before tax is still expected to show a moderate decrease from the previous year.

Automotive segment revenues are expected to be slightly below the previous year's figure. The EBIT margin in the Automotive segment is expected to be at least 7 percent. BMW Group continues to target slight increases in deliveries to customers in the Automotive segment in 2018.

In terms of its core business, BMW said it had always expected 2018 to be a challenging year. Compared with 2017, additional upfront expenditure of around one 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 had been factored into expected earnings for the year.

For the third quarter, net profit was 1.405 billion euros, down 23.9 percent from 1.85 billion euros a year ago.Earnings per share was 2.09 euros compared to 2.76 euros. Profit before tax was 1.845 billion euros, down 26.3 percent.

The EBT margin for the Group came in at 7.5 percent, down from 10.6 percent last year.

Automotive EBIT for the three-month period fell 47.1 percent to 930 million euros.

Group revenues grew 4.7 percent to 24.74 billion euros from last year's 23.63 billion euros. Third-quarter Automotive segment revenues grew by 3.3 percent to 21.11 billion euros.

At 592,303 units, third-quarter deliveries to customers were up 0.3 percent from last year's 590,415 units.

In China, the number of deliveries to customers rose 11.5 percent to 160,047 units, thanks to the ramp-up of the local production of the new BMW X3.

Deliveries of the BMW Group's three premium automobile brands during the first nine months of the year edged up 1.3 percent to 1,834,810 units.

In Germany, BMW shares were trading at 75.26 euros, down 2.16 percent.

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