By Jessica Sier 
 

BMW AG updated its 2020 guidance, widening its earnings margin and predicting profits will be significantly lower than 2019.

The highest negative impact is expected in the second quarter of 2020, and earnings before interest and taxes margin for the automotive segment will likely be between 0% and 3%, the German car manufacturer said late Tuesday.

BMW said group profits before tax will be significantly lower in financial year 2020, and delivery volumes are unlikely to return to normal within weeks of the coronavirus pandemic ending.

The company said return on equity for its financial services segment will now likely fall moderately year-over-year.

"The updated guidance does not, in particular, include, a longer and deeper recession in major markets, a more severe economic slowdown in China as a result of recession in other parts of the world, significant market distortions due to an even stronger competitive environment and possible implications caused by a second wave of infections and associated containment measures," the company said.

BMW will report its first quarter earnings on Wednesday.

 

Write to Jessica Sier at jessica.sier@wsj.com

 

(END) Dow Jones Newswires

May 06, 2020 01:23 ET (05:23 GMT)

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