Luxury automaker BMW says net profit rose 8.2 percent in the first quarter thanks to strong sales in Europe and Asia, but the company gave a restrained outlook for the rest of the year.
Profit rose to 1.64 billion euros ($1.88 billion) from 1.52 billion euros a year earlier. The figure, however, was short of the consensus estimate for 1.68 billion euros as compiled by financial information provider FactSet and BMW was cautious about the months to come.
In its quarterly report Tuesday, it said earnings would ”increase slightly” and cautioned that the company faced rising personnel costs and high levels of investment in new projects and technology. Long-term investment is crucial to coming up with top-selling vehicles, but can divert money from earnings in the shorter run.
It predicted it would keep its profit margins – one of the key earnings figures watched by investors – in its target range of 8-10 percent. The first quarter figure came in at 9.4 percent, off slightly from 9.5 percent a year earlier.
BMW shares fell 3 percent to 78.65 euros in morning trading in Europe.
The Munich-based company said it saw record sales for a first quarter. Numbers were boosted by a jump of 10.5 percent in China and 9.5 percent in the recovering European economy. U.S. sales were off 10.8 percent. Overall, it sold 557,605 vehicles worldwide under its three brands, which also include Mini and Rolls-Royce, an increase of 5.9 percent.
BMW reported strong demand for its X family of sport-utility vehicles. Sales here rose 24 percent, with a sharp jump of almost two-thirds for the smallest X1 vehicle. The next largest, the X3, sold 27 percent more.
Global sales revenue fell 0.3 percent to 20.85 billion euros, pushed down by shifts in currency exchange rates.