'HotWheels' Blog

      We're Talking All About Cars Here, & Trucks, & SUVs!


BMW’s 1st Qtr. Profit Falls, 3-Series Changeover Part of Cause

Filed under: — GM Guy @ 5:30 am

According to Reuters, the slide in BMW profits this first quarter of ‘05 is less than was expected, so things at the home of the Roundel are actually looking up, a little. Everyone on the Old World side of the pond are hurting from the strength of the Euro and at BMW, the actual cost of rolling out and promoting the new 3-Series is still not known. (Now that’s odd. Over here the marketeers would know that number to the second or third decimal point!)

BMW’s first-quarter pretax profit fell 4.6 percent, the world’s largest premium carmaker said on Tuesday, as the weak dollar and the changeover in its key 3-Series car dragged on its core automotive result.

BMW reaffirmed though that it expects earnings this year to roughly match its record 2004 result, helping soothe investor fears after rumors of a profit warning surfaced last week.

Earnings before taxes declined to 812 million euros ($1.05 billion), compared with an average Reuters poll estimate of 834 million and 851 million euros for the first quarter last year.

“Significantly higher raw material prices, currency factors and increased competitive pressure all had a negative impact during the first quarter 2005,” the company said in a statement.

Even though “BMW remains one of the most fundamentally solid companies in the industry", world stock markets have not gone out of their way to reward BMW’s stock. As per Reuters, even though BMW stock trades at 10 times estimated earnings, it is still surpassed by Audi, Mercedes and Volkswagen stock.

Another thing that BMW, and the rest of the world’s automakers need to fear – the Audi A3. I just took a good look at that product and it is fantastic. Hot Avant styling, a really well integrated version of the new Audi grill, tons of room and space utility inside and a TT inspired interior design theme. At $30K fully equipped, what’s not to like? To graduates of ‘05, the hot tip is A3!

BTG Motoring, for all your car, truck or SUV parts and accessories

Powered by WordPress