First Quarter Operating Profit of BMW 20.6% higher

BMW announced that its first-quarter operating profit rose by a forecast-beating 20.6%. The profits of the German car maker was supported by strong demand for large offroaders in Europe and the United States.

Earnings before interest and tax (EBIT) came in at 2.52 billion euros ($2.83 billion), above the 2.191 billion euros forecast in a Reuters poll.

The Munich-based company said on Wednesday that its automotive EBIT margin was 9.5% in the quarter, remaining at the same level to the year-earlier quarter and at the upper end of its target range of between 8% and 10%.

On the other hand, the quarterly return on sales from ongoing business at rival Mercedes-Benz Cars jumped to 9.2% from 7% a year ago. Audi's operating margin slipped to 9.7 % from 10.1 %.

The Munich-based automaker informed that the First-quarter BMW brand sales were up 5.4 % at 451,576 cars, citing continued growth in Europe, North America and China and a 30% jump in deliveries of the X5 sports utility vehicle.

BMW reiterated that it expected record sales and profit before tax this year thanks to the launch of 15 new or upgraded Rolls-Royce, Mini and BMW models.

Automotive segment revenues are forecasted to grow 'significantly' due to the increase in sales volume and exchange rate factors, BMW said.

The company expected a strong growth in revenues. However, it cautioned that some regions continue to be difficult.

"The situation on the Russian automobile market, for instance, is likely to remain difficult. The ongoing process of normalisation of the Chinese automobile market is also likely to continue, resulting in less dynamic growth", said BMW.