BMW’s Q2 earnings up sharply

BMW’s Q2 earnings up sharply

Berlin: Second-quarter earnings at luxury car maker BMW AG surged to euro834 million ($1.1 billion) as robust demand in China helped drive a strong increase in revenues, the company said Tuesday.

The company’s April-June profit was up from euro121 million a year earlier, while revenues climbed 18.3% to euro15.35 billion from euro12.97 billion.

Citing a recovery in global markets and strong demand for new models, BMW already had raised its 2010 sales and earnings forecasts last month. The company underlined those expectations Tuesday.

“We are aiming to achieve significantly higher group earnings in 2010 than in 2009," CEO Norbert Reithofer said in a statement, without offering a specific figure. He also reaffirmed BMW’s aim of boosting full-year sales by about 10% to more than 1.4 million vehicles.

Second-quarter earnings before interest and taxes, or EBIT, soared to nearly euro1.72 billion from last year’s euro169 million.

BMW’s report pleased investors and the company’s shares led Frankfurt’s DAX index of blue-chip stocks in morning trading rising nearly 3.4% to euro43.29.

The number of BMW, Mini and Rolls-Royce cars sold worldwide climbed 12.5 % to 380,412 in the second quarter, the company said.

Car deliveries were up 3.6% in Europe at 212,800 units, with growth in Britain and Spain helping compensate for lower deliveries in Germany, where a government car-scrapping bonus scheme expired last year.

Second-quarter deliveries in the United States were up 5.6% at 66,771 but the most spectacular growth came from Asia, where quarterly sales were up 59.4 % at 69,927 cars. China and Taiwan accounted for 45,200 of those vehicles a 98.6% increase.

“Sharp sales volume growth on major markets and a high-value model mix are the main reasons for the strong second-quarter performance," Reithofer said.

The company also credited better selling prices as a factor that helped make its core automobile segment more profitable. Second-quarter EBIT at the sector was nearly euro1.32 billion compared with a loss last year of euro31 million.

“We have also used the economic crisis as a source of opportunity and have improved efficiency significantly in all areas of the company," Reithofer added.

BMW said its total work force stood at 95,502 at the end of the second quarter, down 2.8% from a year earlier. However, the company said it would recruit some 1,000 new employees this year, about half of them in Germany and mostly in research and development or purchasing and sales.

BMW posted a first-half net profit of nearly euro1.16 billion, compared with a loss of euro31 million in the first six months of 2010.

Its revenues for January-June were up 13.5% to euro27.79 billion from euro24.48 billion, while car deliveries rose 13.1% to 696,026.