Bmw hurtles through Frankfurt, quarter down but analysts see resilience

(Il Sole 24 Ore Radiocor) - Bmw (+5.4% to 81.40 euros) romped through the Frankfurt Stock Exchange on the back of a quarterly report that was down but, according to analysts, showed some resilience and allowed the Bavarian auto giant to confirm its annual outlook. The stock topped the main German list on a day of generalised rises for the automotive sector.

Closing the lens on the accounts of the company (which also has Mini and Rolls Royce in its portfolio), profit after tax for the quarter fell to EUR 1.67 billion from EUR 2.17 billion in the same period last year. Gross profit, on the other hand, fell 25 per cent to EUR 2.3 billion, while sales fell 8.1 per cent to EUR 31.01 billion, below consensus. The numbers were affected by intense competition in the major automotive markets, particularly in China, raw material prices and the trade uncertainty triggered by Donald Trump's tariffs, Bmw said in a note. All factors that have also affected the stock's stock market performance, which has left more than 12% on the ground since the beginning of the year. At the same time, however, according to analysts, these quarterly indicators show the Bavarian company in a substantially stable position, a factor that also emerges from the confirmation of annual targets.

"Bmw's results show a very good start to the year," says JPMorgan, which points out that declines in China were offset by robust sales in Europe. Bernstein's experts are also on the same page: 'Bmw's first quarter results indicate a good performance in the automotive sector, with profitability and cash flow exceeding expectations,' they write. Moreover, although the German carmaker "reported lower-than-consensus group revenue and EBIT," the analysts point out, "this was partly driven by weaker-than-expected results in the motorbike and financial services segments. On the other hand, "the Ebit margin for the automotive segment, a core business for Bmw, came in at 5%, midway through the 4% to 6% range for the year, and 30 basis points above consensus". This result, Bernstein points out, was achieved without recording any tariff reimbursements in the United States'.

For the future, it will have to be seen how BMW will cope with market challenges, from tariffs to the transition to electric vehicles. To do this best, the group is preparing for a change at the top, with production manager Milan Nedeljkovic replacing long-time boss Oliver Zipse.