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BAYERISCHE Motoren Werke AG, the world's largest maker of luxury cars, said yesterday that its first-quarter profit fell 17 percent after a slowing US economy hurt prices in the world's biggest automobile market.
Net income fell to 487 million euros (US$758 million), or 74 cents a share, from 587 million euros, or 90 cents, a year earlier, Munich-based BMW said in a statement yesterday.
According to Bloomberg News, the company's revenue advanced 11 percent to 13.3 billion euros.
BMW booked a 236 million-euro charge because of bad debts and lower values on cars it sells in the United States after leases expire. Chief Executive Officer Norbert Reithofer said pretax profit will still rise this year as the company boosts sales to eastern Europe and Asia and lures buyers with the X6 crossover and upgrades of the X5 SUV and Mini car.
"The revenue side of things was actually better than we expected," said Michael Tyndall, an analyst at Nomura Securities in London with a "sell" rating on the shares.
"Some in the market might think that they've taken the hit and now we can move on. If that's your thinking then maybe BMW is a good place to be, given how bad things are."
BMW, which had said on April 24 it would book the US charge, rose as much as 1.31 euros, or 3.7 percent, to 36.48 euros and was trading up 1.6 percent at 35.72 euros in Frankfurt. The stock has lost 16 percent this year, reducing the company's value to 23 billion euros.
Analysts surveyed by Bloomberg had predicted net income of 603 million euros, prior to announcement of the charge, on sales they said would rise 5.6 percent to 12.6 billion euros.
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