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    BMW   DE0005190003

BMW AG

(BMW)
  Report
Real-time Estimate Tradegate  -  04:51 2022-10-05 am EDT
71.36 EUR   -2.05%
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BMW sees volatile 2022 with chips and energy squeeze in focus

08/03/2022 | 02:09am EDT

BERLIN, Aug 3 (Reuters) - BMW lowered its output forecast and warned of a highly volatile second half on Wednesday, pinpointing supplies of energy in Europe and chips worldwide as the two crucial factors to the carmaker hitting full-year earnings targets.

New incoming orders were beginning to fall but order books remained filled for the next few months, chief executive Oliver Zipse said.

Demand for electric models was particularly high, finance chief Nicolas Peter added. The premium carmaker was on track to meet its goal of doubling all-electric car sales by year end and expected total sales growth of 5% to 10% in the second half boosted by strong Asian markets, he said.

Still, BMW expects year-end deliveries to fall short of last year's record highs of 2.52 million.

Tightening sanctions on Russia, interruption of gas supply or the possibility of the war in Ukraine spreading were not factored into its forecast.

"The crucial factor will be how the supply situation develops – not just for semiconductors, but also energy supplies in Europe," Zipse said.

BMW shares were down 4.9% at 0931 GMT.

Daniel Schwarz, analyst at Stifel, called its outlook "rather disappointing" while Berstein Research noted how BMW became the first carmaker to signal caution about demand.

ENERGY EMERGENCY PLANS Germany and other European Union members have adopted emergency plans to curb gas use amid fears that Russia could further cut or stop supplying gas to Europe in response to Western sanctions over its invasion of Ukraine.

BMW consumes around 3,500 gigawatt hours of energy annually in Germany and Austria, three-quarters of which comes from natural gas.

The carmaker could replace the around 500 gigawatt hours of electricity produced per year from gas-powered combined heat and power plants by buying electricity from elsewhere, Zipse said. Replacing gas used in manufacturing processes would be more complex.

"Partial compensation is possible... even if it works, it will certainly be expensive. There is no way we will be able to maintain the costs per kilowatt hour," he added.

A survey by Germany's Ifo institute on Wednesday showed German carmakers' business situation beginning to deteriorate in July, with order backlogs shrinking and price expectations plummeting.

BMW struck a more negative note than competitor Mercedes-Benz, which last week raised its earnings outlook for the year after profits and revenues grew in the second quarter despite falling unit sales.

The Munich-based carmaker's earnings fell 31% in the second quarter to 3.4 billion euros ($3.46 billion) despite growing revenues, still beating a 3.13 billion euro forecast in a Refinitiv poll of eight analysts.

The consolidation of its China joint venture BMW Brilliance Automotive pushed up revenues in the first half but dampened second quarter earnings, BMW said, reporting an automotive margin of 8.2%, down from last year's 15.8%.

Overall, the reevaluation of the Chinese joint venture shares boosted earnings before tax by 7.7 billion euros in the first half. ($1 = 0.9825 euros) (Reporting by Victoria Waldersee, additional reporting by Maria Sheahan; Editing by Tomasz Janowski)


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
BMW AG -2.16% 71.28 Delayed Quote.-17.67%
MERCEDES-BENZ GROUP AG -2.80% 53.48 Delayed Quote.-18.63%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) -0.22% 58.9 Delayed Quote.-19.64%
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Analyst Recommendations on BMW AG
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Financials
Sales 2022 133 B 133 B 133 B
Net income 2022 14 737 M 14 687 M 14 687 M
Net cash 2022 23 675 M 23 595 M 23 595 M
P/E ratio 2022 3,17x
Yield 2022 10,1%
Capitalization 47 424 M 47 264 M 47 264 M
EV / Sales 2022 0,18x
EV / Sales 2023 0,15x
Nbr of Employees 118 909
Free-Float 57,5%
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Technical analysis trends BMW AG
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Income Statement Evolution
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Mean consensus OUTPERFORM
Number of Analysts 24
Last Close Price 72,85 €
Average target price 103,86 €
Spread / Average Target 42,6%
EPS Revisions
Managers and Directors
Oliver Zipse Senior VP-Corporate Planning & Product Strategy
Nicolas Peter Group Leader-Corporate Finance
Norbert Reithofer Chairman-Supervisory Board
Susanne Klatten Independent Member-Supervisory Board
Manfred Schoch Chairman-General Works Council
Sector and Competitors
1st jan.Capi. (M$)
BMW AG-17.67%47 264
TOYOTA MOTOR CORPORATION-7.79%184 134
VOLKSWAGEN AG-26.00%74 652
MERCEDES-BENZ GROUP AG-18.63%55 770
GENERAL MOTORS COMPANY-43.94%47 926
FORD MOTOR COMPANY-44.78%46 112