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BMW's first-quarter profit plunges 38 percent to on costs of new model launches

BMW's first-quarter profit plunges 38 percent to on costs of new model launches

Luxury car maker BMW AG said Thursday its first-quarter profit plunged 38 percent as it spent more money on launching new models and because last year's figure included a special gain from an exchangeable bond in Rolls-Royce Group PLC.
The Munich-based company earned euro587 million (US$797.62 million) in the three months through March 31, compared with euro948 million (US$1288.14 million) a year ago. That was slightly better than the euro568 million (US$771.8 million) analysts polled by Dow Jones Newswires had expected.
Sales were up 2.9 percent at euro11.95 billion (US$16.24 billion), slightly better than the euro11.61 (US$15.78) analysts had predicted.
The company's pretax profit dropped 34 percent to euro852 million (US$1.15 billion), lower than the euro861 forecast.
The company said it was optimistic about its performance in the coming year, with sales expected to improve as consumers buy its new 3-series convertible, the redesigned X5 and its 5-series models.
"We expect business to increase noticeably in the coming months," BMW Chief Executive Norbert Reithofer said. "We are right on course to achieve our targets for the full year.
In addition to increasing sales volume in the "high single-digit percentage range" to over 1.4 million vehicles, BMW expects to achieve pretax profit above the record level posted in the previous year.
Reithofer said that the rising euro and higher prices for raw materials like steel and rubber, would nevertheless weigh somewhat on earnings.
Last year, BMW's pretax profit was euro4.12 billion (US$5.6 billion), up 26 percent from 2005.
Shares of BMW fell more than 2.9 percent to euro44.61 (US$60.62) in Frankfurt.
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Updated : 2021-04-23 08:17 GMT+08:00