| BMW reports smaller-than-expected profit, cautiously optimistic for 2010 |
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11/03/2010 17:16 (703 Day 06:56 minutes ago) | |||||
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The FINANCIAL -- German luxury car maker BMW on March 11 posted a better-than-expected 2009 profit and said it is cautiously optimistic for 2010.
Net income fell 36 percent to 210 million euros ($287 million), or 31 cents a share, from 330 million euros, or 49 cents, a year earlier, the Munich-based company said today in a statement. BMW kept its dividend unchanged at 30 cents a share, surpassing analysts’ estimate of a 25 cent payout, Bloomberg reported.
The maker of BMW, Mini and Rolls-Royce vehicles eliminated 3,800 jobs, or about 3.8 percent of its workforce, amid the worst auto-industry crisis in decades, according to the same source. The company expects to “grow profitably” this year, boosted new models such as the 5- Series sedan and Mini Countryman crossover. “BMW has done well to remain profitable in a difficult environment,” said Mike Tyndall, an automotive specialist at Nomura Securities in London. “The dividend payout suggests optimism in the future.”
At 1159 GMT, BMW shares were trading 0.9 percent higher at 32.535 euros, in line with European car sector index .SXAP, Reuters reports. BMW earnings surpassed those of rival Mercedes-Benz but were behind those of Bavarian competitor Audi (NSUG.DE), which benefits from the economies of scale at parent company Volkswagen.
This becomes increasingly important as premium carmakers are forced to move downmarket, offering smaller, less lucrative models and engines needed to cut their carbon footprint ahead of ever-stricter emission regulations, according to the same source. Net profit sank 47 percent to 210 million euros. It was the group's lowest annual net income since a 2.5 billion euro loss in 1999 but the figure beat analyst expectations for 174 million. BMW said it had a loss before interest and taxes in the automotive segment but a profit before interest and taxes of 93 million euros in the fourth quarter.
Last year, BMW was hit hard by eroding demand for luxury vehicles and a sharp contraction of the U.S. market, until recently BMW's largest sales region. It sold 1.26 million cars in 2009, down about 13%. It forecast sales will grow by a single-digit percentage this year to over 1.3 million cars, The Wall Street Journal reports. New or revamped models such as BMW 5-Series, the X1 and the Mini Countryman are expected to fuel a sales recovery this year.
"The BMW Group will, however, grow profitably thanks to new models and the expected gradual global economic recovery in 2010," BMW said, according to the same source. "Our new models will provide us with a tailwind over the course of the year."
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