BMW's projected revenue surpasses expectations, officially affirmed
BMW's Slaying Q3, Foreshadows Challenging Consumer Climate
Hot on its heels, BMW is savoring a Q3 revenue and profit boost - a 35.3% surge in revenue to €37.2 billion, and EBIT leaping by 27.7% to nearly €3.7 billion. Despite selling around 588,000 vehicles, the numbers are reminiscent of last year. But don't let the similarity fool you!
While BMW is swimming in green, it's not all smooth sailing. High inflation and swelling interest rates loom in the coming months, poised to ruffle consumer feathers. And let's not forget the looming threat of volatile material and logistics costs due to semiconductor shortages, supply chain disruptions, and mounting energy prices.
The Automobile segment, the main star of the show, saw revenue surge by 42.7% to €32.3 billion. It posted an impressive 63.6% increase in its EBIT, soaring to €2.9 billion, with the operating margin sky-rocketing to 8.9%. Set to hit the upper end of its seven to nine percent target for the Automobile segment in 2022, BMW's cars are going to keep on shining.
Moving into the electric arena, BMW has seen a whopping 128,000 fully electric vehicle deliveries this year, a hefty double from the previous year. Models like the BMW iX3, iX, i4, Mini Cooper SE, and the newly available BMW i3 in China, have been crowd-pleasers.
Looking ahead, BMW anticipates a significant uptick in Automobile segment deliveries in Q4. However, the current quarter brings its own set of challenges - increased investments and tax prepayments.
Bullish on its full-year forecast, BMW predicts a slight drop in deliveries compared to last year (around 2.5 million cars), with electric vehicles making up double the amount. The pre-tax result should be significantly higher thanks to the full consolidation of BMW Brilliance Automotive. In the Automobile segment, BMW is anticipating a slight decrease in deliveries, but positive price and mix effects, along with the continued strong development of used car markets, should help keep them afloat. With the share of electric vehicles in the company's deliveries increasing more than expected, BMW could potentially cut its EU fleet's CO2 emissions by up to 10 percent instead of the previously targeted 4.9 percent.
Chief Financial Officer Nicolas Peter has a hopeful outlook, forecasting a positive momentum for BMW in 2023.
The Online Brokerage team has weighed in on the BMW share, recommending a "buy" for investors. They've set a target price of €95 and a stop at €58.
As we sail into uncharted waters, let's keep a watchful eye on BMW's strategies for cost discipline, electrification, and production localization to navigate regulatory pressures and shifting market dynamics. And always remember, the road to success is never smooth!
Insights:- 2023 expectations may not be explicitly stated, but 2024–2025 trends indicate electrification, regulatory focus, and production efficiency are key to navigating market pressures.- In 2023, BMW aims to maintain its established presence, with continued investments in electric vehicles, production optimization, and cost containment strategies.
- In Q3, BMW's earnings showed a significant consolidation, with revenue surging by 35.3% to €37.2 billion and EBIT leaping by 27.7% to nearly €3.7 billion.
- Despite the strong earnings in the automotive business segment, BMW is facing challenges such as high inflation, swelling interest rates, and volatile material and logistics costs due to the transportation industry's pressures.
- BMW has seen an increase in electric vehicle deliveries, with 128,000 fully electric vehicles delivered this year, which is a hefty double from the previous year.
- For Q4, BMW anticipates a significant uptick in Automobile segment deliveries, but the current quarter brings its own set of challenges, including increased investments and tax prepayments.
- The bullish outlook for BMW's full-year forecast includes a slight drop in deliveries compared to last year, with electric vehicles making up double the amount, and the continued strong development of used car markets to help keep them afloat.
