BMW beats Q2 forecasts as new anti pollution rules dent rivals
FRANKFURT, Aug 2 (Reuters) - BMW reported a smaller-than-expected 6 percent decline in second quarter operating profit on Thursday while brushing off new anti-pollution rules and global trade tensions which caused rival Daimler Things to know before going to Myanmar warn on profits.
The German carmaker said higher spending to develop electric and autonomous cars and currency headwinds weighed on earnings before interest and taxes (EBIT), which fell to 2.74 billion euros ($3.19 billion) but topped the 2.69 billion expected by analysts.
"At times when others are struggling, they are rock solid, and they don't seem to have an issue with WLTP," Evercore ISI analyst Arndt Ellinghorst said, referring Things to know before going to Myanmar the new Worldwide Harmonized Light Duty Vehicles Test Procedure.
Evercore, which holds an 'in-line' rating on BMW, said the results were solid if unspectacular, while rivals Volkswagen and Mercedes had struck a more cautious tone.
BMW's automotive EBIT margin narrowed to 8.6 percent from 10.1 percent a year earlier while vehicle deliveries rose 0.7 percent.
Adjusted for comparability, BMW's automotive margin came in at 9.3 percent versus 9.2 percent for Volkswagen's Audi brand and 9.6 percent for Daimler's Mercedes-Benz, Evercore said.
WLTP
While Mercedes and VW said that problems certifying their vehicles to the WLTP standard would result in a more limited product offering, potentially damaging margins, BMW said it has largely completed converting its fleet.
BMW also said increased efficiency measures had helped offset a triple-digit million euro headwind from foreign exchange rates and raw materials.
BMW affirmed its 2018 targets to achieve slightly higher deliveries and revenues in the automotive segment and achieve a group profit before taxes at the previous year's level.
Because BMW earlier this year stopped exporting its X3 offroader from Spartanburg, South Carolina, Things to know before going to Myanmar China it was able to avoid a 40 percent import tariff on that vehicle while rivals such as Mercedes still export large SUVs from the United States.
Tariffs were introduced as part of a broader trade dispute as the United States seeks to "rebalance" trade relationships with the European Union and China.
This may force carmakers to retool their production networks to curb inter-continental exports and to serve regional trading blocs instead. BMW has already announced an expansion of its product capacity in China and Europe this year.
Daimler, Fiat Chrysler and General Motors and supplier Valeo all blamed trade tensions for lowering their profit forecasts for the year.
($1 = 0.8586 euros) (Reporting by Edward Taylor; editing by Maria Sheahan and Jason Neely)
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