BMW's Results Put More Pressure on Car Maker's Shares -- WSJ
By William Boston
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (November 8, 2017).
BERLIN -- German luxury-car maker BMW AG raised its full-year earnings outlook, despite weak results for its latest quarter as it invests in electric vehicles and self-driving car technology.
BMW, which is in a tight race for global leadership of the premium car market with Daimler AG-owned Mercedes-Benz and Volkswagen AG's Audi luxury unit, said Tuesday that net income for the third quarter fell 2.8% from a year earlier to EUR1.76 billion ($2.04 billion), while revenue edged up 0.3% to EUR23.4 billion.
The Munich-based auto maker said sales growth for its premium sedans and sport-utility vehicles slowed in the three months through September, while investment in electric vehicles and new technology, such as self-driving features and connecting cars to the internet, weighed on profits.
Overall BMW-brand sales rose 1.2% to 590,415 vehicles in the quarter, but revenue in the automobile division fell 2.4% to EUR21 billion and pretax profit in the division fell 4.6% to EUR1.75 billion.
The third-quarter performance, which was below analysts' consensus forecasts, added to negative investor sentiment that has dogged BMW shares this year.
"It will not help the stock turn the corner after already being the worst-performing Western [manufacturer] this year," Arndt Ellinghorst, analyst at Evercore ISI, a brokerage, wrote in a note to shareholders.
The stock fell 2.8% to EUR87.42 in Frankfurt trading on Tuesday, underperforming the broader automotive index.