BMW on track as cost-cutting drive lifts Q3 profits

(Sharecast News) - German auto giant BMW said it remains on track to hit full-year targets after cost-cutting measures bolstered third-quarter profits, though revenues came up short of analysts' estimates

The company delivered 588,140 BMW, MINI and Rolls-Royce vehicles to customers during the quarter, up 8.7% on last year. However, revenues were down 0.3% at �32.31bn, missing the �33.84bn consensus forecast.

"In the third quarter, we once again proved that our business model is robust and resilient", said chair Oliver Zipse.

"Thanks to our broad model and drive train portfolio, we were able to increase our global sales - with BMW M and our electrified vehicles as the main growth drivers. At the same time, we remain fully on track to meet Europe's ambitious CO2 targets for 2025 - without relying on flexibility mechanisms or pooling."

Third-quarter profits were in line with expectations with earnings before interest and tax of �2.26bn, up 33.3% on the year before due to a big gain in the EBT margin to 7.2% from 2.6%.

The company said it had "transitioned from last year's record levels of future investment" - required for the electrification and digitalisation of the portfolio - with R&D spending down 22.3% in the third quarter, while capital expenditure fell 23.4%. Sales and admin expenses were also cut by 8.8%.

"We are reaping the benefits of having invested in the future early, with the peak now already behind us. In the fourth quarter, we expect further cost reductions, as well as lower research and development spending and capital expenditure," said finance head Walter Mertl.

Looking ahead, 2025 pre-tax profits are still expected to decline slightly, in line with guidance given last month, with the company still expecting slight sales growth for the full year despite lower volume expectations in China.

BMW shares were up 0.9% at �81.02 by 1217 in Frankfurt, having risen as much as 2.6% earlier on.