BMW reported a 34 per cent drop in first-quarter pretax profit today as margins were squeezed in its core auto business.
BMW pretax profits fall. Image: Frank Miller.
Earnings before tax fell to €852 million, shy of the average estimate of €859 million analysts had been expecting.
But earnings before tax plunged 20 per cent to €609 million at its core automotive division, whose 5.3 per cent pretax return on sales fell far short of last year's 6.8 per cent margin and the poll estimate of a 5.9 per cent profitability rate.
"We expect business to increase noticeably in the coming months," chief executive Norbert Reithofer said, confirming 2007 pretax profit would rise from last year's record level once a €372 million one-off gain was excluded.
BMW has said the extent of its profit growth would largely depend on the development in external factors such as raw material costs and currency factors, which combined to wipe out €844 million from its income statement last year.