By Friedrich Geiger
BERLIN--German premium car maker BMW AG on Tuesday reported a
decline in second-quarter profit because of rising costs, despite a
rise in revenue and car sales.
Second-quarter net profit fell 1.1% to EUR1.74 billion ($1.91
billion), beating analysts' forecasts of EUR1.60 billion. Personnel
costs and expenditures on new product startups were higher in the
quarter and a larger share of compact cars also weighed on
earnings, said the company.
The fall in profit came despite a 20% rise in revenue to
EUR23.94 billion after the number of BMW, Mini and Rolls-Royce cars
delivered to customers rose 7.5% to 573,079.
BMW's closely watched earnings before interest and tax margin of
the automotive business deteriorated significantly to 8.4% from
11.7%.
The Chinese market is "becoming increasingly competitive," said
BMW, adding to investor worries after Chinese partner Brilliance
Automotive Holdings Ltd. warned that higher selling costs of the
joint venture with BMW weighed on earnings, and rival Volkswagen AG
received a lower operating profit contribution from China in the
second quarter.
For the full year, BMW continues to expect a solid rise in
pretax group profit and significant revenue growth at its
automotive segment.
Write to Friedrich Geiger at friedrich.geiger@wsj.com
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