BMW AG reported better-than-expected earnings in the third quarter, as higher prices for the automaker’s top-end models helped offset flat deliveries.
Earnings before interest and tax soared 28 percent to 3.68 billion euros (US$3.6 billion), BMW said yesterday.
The earnings exceed analyst estimates of 3.52 billion euros, as the company confirmed its full-year guidance while expecting inflation to weigh on orders.
Photo: Reuters
“After nine months, we are on track to meet our targets for the year,” BMW CEO Oliver Zipse said in a statement. “The market success of our fully-electric models, in particular, means we can look forward to the coming months with confidence.”
BMW and its peers are defying the increasing drag from macroeconomic factors thanks to robust demand for its priciest models, with Stellantis NV yesterday reporting a jump in revenue, and Mercedes-Benz AG raising its outlook for the second consecutive quarter last month.
Still, economic headwinds, including surging energy costs, are building. Volkswagen AG last week cut its sales projection for the year, citing scarce semiconductor availability and persisting logistics challenges.
Inflation and rising interest rates are expected to weigh on purchases in the coming months, BMW said, adding that its higher-than-average order books should return to normal, especially in Europe.
The manufacturer does not anticipate production disruptions due to energy shortages this year, and predicts a jump in vehicle deliveries in the current quarter from the three months through to September.
Robust demand for fully electric models, such as the iX3 sport utility vehicle, is expected to bolster revenue. BMW predicts that electric vehicle sales should jump 70 percent next year after they more than doubled in the first nine months of this year.
Stellantis’ sales surged in the third quarter thanks to strong vehicle prices and higher deliveries led by models such the Jeep Compass, as positive currency effects boosted the result, the company said yesterday.
Net revenue climbed 29 percent to 42.1 billion euros, the maker of Ram pickups and Fiat cars said, beating a consensus forecast.
Stellantis reaffirmed a goal of double-digit returns on adjusted operating income for the full year.
“We are still very positive about the full year financial performance,” chief financial officer Richard Palmer said on a call with reporters.
Third-quarter “growth was driven by all of our regions,” he said.
Stellantis is targeting more than 75 fully electric models by 2030 with annual sales of 5 million vehicles, while maintaining double-digit returns over that time.
Vehicle demand in the US, the company’s largest contributor to profit, is “still pretty strong,” and the market continues to be supply-constrained, Palmer said on the call.
In contrast, there is “some slower intake of orders” in Europe “but the order bank itself is still very stable” taking Stellantis “well into the middle of next year.”
Delivering cars to customers in Europe continues to be a challenge due to supply constraints linked to semiconductor shortages and a lack of drivers and trucks, Palmer said, adding that Stellantis expects to resolve these issues this quarter.
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