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MarketScreener Homepage  >  Equities  >  Xetra  >  BMW AG    BMW   DE0005190003

BMW AG

(BMW)
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Real-time Estimate Quote. Real-time Estimate Tradegate - 10/01 11:57:33 am
62.695 EUR   +1.14%
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BMW loses almost $800 million as sales slide during lockdowns

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08/05/2020 | 05:28am EDT
The headquarters of German luxury carmaker BMW is seen in Munich

BMW expects to make a profit this year if demand continues to recover, despite posting a record loss for its car division in the second quarter after sales slumped 25% because of coronavirus lockdowns, it said on Wednesday.

The German manufacturer of BMWs, Minis and Rolls-Royces said sales had started to recover during the latest three-month period, including a 17% jump in deliveries in China, but the rebound would not fully make up for sales lost to COVID-19.

As a result of the sales slide, and higher costs for developing low-emission cars, BMW posted a pretax loss of 498 million euros, its first in over 11 years, and an operating loss of 666 million euros ($790 million) for the quarter.

Shares in BMW fell 3% following the results, with some analysts saying they had not expected such a big loss in earnings before interest and taxes (EBIT).

"What matters now is how robust this upward trend is and when individual markets will follow suit," said Chief Executive Oliver Zipse, adding that its overall cars sales in July were higher than last year.

BMW said, however, that its outlook did not factor in the potential impact of a second wave of COVID-19 infections, nor the prospect of a more sustained or deeper recession than expected in its key markets.

Zipse said on a call that developments in the United States, which has the highest number of COVID-19 cases and deaths worldwide, were "extremely worrying".

Sales in the United States made up 12.6% of deliveries in the first half of 2020, down from 15.2% in 2020. Overall, BMW said it expected global demand for luxury cars to fall by a fifth this year.

'CAUTIOUS OPTIMISM'

The COVID-19 pandemic has already hit carmakers such as Fiat Chrysler, Ford and Daimler particularly hard at time when the auto industry is ramping up spending to clean up their combustion engines as well as developing low-emission technologies to conform with stringent European anti-pollution rules.

BMW's EBIT margin for cars slumped to minus 10.4%, an historic low, down from 6.5% in the second quarter last year, though it maintained the forecast it made in May for a margin of 0% to 3% for the year as a whole.

By contrast, electric-only car manufacturer Tesla saw its automotive gross margin widen to 25.4% in the second quarter, up from 18.9% a year earlier, despite a 5% drop in deliveries.

Jefferies analyst Philippe Houchois said BMW's margin forecast for the year suggested a healthy recovery in the second half of 2020, even though the second-quarter results were below the consensus.

"We are now looking ahead to the second six-month period with cautious optimism and continue to target an EBIT margin between 0% and 3% for the automotive segment in 2020," Zipse said in a statement.

BMW reiterated that it expected to make a pretax profit in 2020, albeit well below 2019 levels and for car deliveries to customers to fall significantly this year.

By Edward Taylor

Stocks mentioned in the article
ChangeLast1st jan.
BMW AG 1.08% 62.66 Delayed Quote.-15.24%
DAIMLER AG 1.54% 46.745 Delayed Quote.-6.76%
FIAT CHRYSLER AUTOMOBILES N.V. -0.86% 10.378 Delayed Quote.-20.66%
TESLA, INC. 2.41% 439.325 Delayed Quote.412.77%
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Financials
Sales 2020 95 860 M 113 B 113 B
Net income 2020 2 932 M 3 442 M 3 442 M
Net cash 2020 17 409 M 20 433 M 20 433 M
P/E ratio 2020 13,9x
Yield 2020 2,10%
Capitalization 39 973 M 46 939 M 46 917 M
EV / Sales 2020 0,24x
EV / Sales 2021 0,23x
Nbr of Employees 133 778
Free-Float 57,3%
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Mean consensus OUTPERFORM
Number of Analysts 28
Average target price 67,44 €
Last Close Price 61,99 €
Spread / Highest target 93,6%
Spread / Average Target 8,80%
Spread / Lowest Target -44,1%
EPS Revisions
Managers
NameTitle
Oliver Zipse Chairman-Management Board
Norbert Reithofer Chairman-Supervisory Board
Nicolas Peter Chief Financial Officer
Susanne Klatten Independent Member-Supervisory Board
Manfred Schoch Deputy Chairman-Supervisory Board
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