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Reuters
FRANKFURT
BMW became the third German carmaker to report better-than-expected quarterly results ahead of schedule on Thursday, benefiting like rival Daimler from strong demand in China and a revaluation of its stake in map maker HERE.
Pretax profit jumped 27 percent to 3.01 billion euros ($3.23 billion) in the first quarter, more than expected even taking into account one-off gains that included 183 million euros from revaluing HERE after Intel invested in it.
Mercedes-maker Daimler last week posted an 87 percent jump in quarterly operating profit, while Volkswagen on Tuesday reported a 28 percent rise, helped by a return to earnings growth at its core VW brand."The European market, China and some emerging markets are developing much better than expected. Only the U.S. market is tougher,"said Evercore ISI analyst Arndt Ellinghorst, explaining the strong results from German carmakers. He rates BMW shares"in line".
German auto association VDA expects global car sales to rise 2 percent this year, driven by China where sales are seen rising by 6 percent, while demand in the United States and western Europe is seen stable.
But European car sales leapt 10.9 percent in March, led by buoyant demand in the region's top five markets and extra selling days due to a late Easter this year that saw the holiday fall in April. Analysts were impressed by the extent to which BMW beat expectations, noting increased profits from Chinese joint venture BMW Brilliance Automotive.
"While this beat might seem moderate compared to the one seen at VW, it is actually slightly better than the one at Mercedes Benz Car division ... despite a less favourable product cycle,"wrote Barclays analyst Kristina Church, who rates BMW"overweight/neutral". BMW shares were little changed at 1350 GMT. The revaluation of BMW's stake in HERE came as little surprise after Daimler - a co-owner together with Volkswagen - increased the valuation of its stake. Other valuation effects lifted BMW's financial result by a further 122 million euros.
Intel said in January it was buying a 15 percent stake in HERE for an undisclosed sum, after Navinfo, Tencent and Singapore's sovereign wealth fund agreed to buy a 10 percent stake in December.
