RR. Rolls-royce Holdings Plc

BMW AG beat market expectations with an 11% rise in second-quarter net profit, helped by robust sales of the luxury auto maker's three car brands including a jump in demand for Rolls-Royce limousines.

The Munich-based manufacturer on Tuesday that net profit rose to €1.94 billion euros ($2.2 billion) in the three months to end June from €1.74 billion a year earlier, ahead of the average analysts' forecast for €1.80 billion.

Revenue rose 4.5% to €25.01 billion partly on a 5.7% rise in sales of BMW cars and sport-utility vehicles to 507,814 units. Sales of the German group's MINI brand rose 5.4% to 96,587, while Rolls-Royce sales rose nearly 15% to 1,133, leaving overall sales up 5.7%.

BMW said its operating profit margin at its automotive business widened to 9.5% from 8.4% as it also trimmed spending on research and development as a percentage of revenue in the second quarter.

The robust showing by BMW underlines the recent buoyant market for premium cars, dominated by the German auto makers, though BMW's own sales fell behind that of Daimler AG's Mercedes-Benz in the first half of this year. BMW sales remained ahead of Volkswagen AG's Audi unit.

"We find it quite remarkable that BMW is effectively the most profitable and stable German premium car maker despite lower mix and an older fleet compared to [Audi and Mercedes-Benz]," said Arndt Ellinghorst of Evercore ISI.

BMW confirmed its full-year target for a slight increase in pretax profit, but warned again of a volatile political and economic environment for the auto industry, not least in the aftermath of the June referendum vote in the U.K., where BMW's MINI and Rolls-Royce units are based, to leave the European Union.

"The decision taken by the electorate to leave the EU isn't expected to have any major impact on the BMW Group's operations in the U.K. in the short-term," BMW said.

"It is not possible to assess the broader impact of the impending changes" given the uncertainty over how and when Britain will renegotiate rules for the movement of people and goods with the EU, BMW said.

BMW shares opened down 1.6% in Frankfurt.

The auto maker said second-quarter growth in Europe—notably in Germany and the U.K.--and Asia offset a fall in sales in the U.S., down 9.7% in the second quarter, and compensated for the impact of unfavorable exchange rates in the period.

Among the models in its lineup, the auto maker said demand was strongest in the quarter for its range of BMW SUVs and the latest version of its top-of-the-range 7 Series sedan in addition to its revamped MINI range. The auto maker said it has sold 514 Rolls-Royce Dawn cars, the latest addition to the super luxury British brand's lineup, since its launch in March.

Write to Friedrich Geiger at friedrich.geiger@wsj.com

(END) Dow Jones Newswires

August 02, 2016 04:35 ET (08:35 GMT)

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