BMW Q3 Profits Weaker Than Expectations

German car manufacturer BMW has today unveiled third quarter results for the period ended September, which paint a downwards trend for the fortunes of the company, largely it is thought to problems with the strong euro and rising costs of production.

The luxury car brand reported an increase of 6.3% in profits prior to tax over the period, despite expectations from market analysts that the performance would have been significantly stronger. Profits were up to 765 million euros.

By mid morning trade BMW had lost just under 5% on its share price from opening, as a result of investors fearing the short term outlook for the group’s profitability, particularly as a result of the ongoing strength of the euro on international currency exchanges damaging its exports market, mainly to the US.

Amongst other problems the company today cited growth in raw material costs, particularly in relation to oil and plastics, as being a driving force in growing expenses offsetting actual high profits as a result on continuing strong sales.

The US market has been something of a paradox over the last period, with Toyotas and Japanese imports outperforming their American counterparts in terms of sales. For BMW particularly, its performance stateside has been significantly hindered as a result of the fall in dollar value, pushing up purchase prices.

Speaking today on the results a spokesperson from BMW said in a written statement that the company was performing on schedule to meet its year end targets, and that it was likely that they would continue to grow at a moderate pace despite these interim setbacks.

It remains to bee seen whether the company, which also manufactures Rolls-Royce, will be able to continue to build on its profitability, with a view to overcoming these short-term hurdles.

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