BMW profit roars ahead

August 7, 2001 Posted: 1610 GMT

LONDON (CNN) -- BMW said profit more than doubled as models such as the X5 sport/utility vehicle and the revamped 3 series saloon boosted sales in the U.S.

The German luxury automaker (FBMW) said on Thursday second-quarter net profit rose to 525 million ($462 million), or 0.82 a share, from 232 million, or 0.33 million, a year earlier.

Profit from ordinary operations rose 62.3 percent to 847 million. The average forecast among analysts polled by Reuters was 787 million.

In the year-earlier period, BMW lost 338 million at Rover, the UK carmaker it bought six years earlier with disastrous results. The German company agreed in May 2000 to sell most of Rover to UK investment firm Phoenix for a nominal sum of £10 ($15).

The company also sold Land Rover, the best performing part of Rover, to Ford Motor (F: Research, Estimates) for 3 billion. BMW's new X5 is a sport/utility vehicle designed to compete head-to-head with Land Rover models such as the Range Rover.

BMW is also attacking the small-car market, having kept the rights to one of the choicest models in Rover's past, the Mini. The new, BMW-designed Mini went on sale in Britain in July and will hit showrooms in continental Europe.

In the second quarter of 2001, BMW sold 238,058 new cars, representing an 8.8 percent increase on the same quarter last year. Overall, sales rose 5.1 percent by value to 10.6 billion. Adjusted for the sale of its loss-making Rover unit sales rose 27.6 percent.

The company said it would continue to expand its range of models, with new 6 series and 1 series models, and will start selling Rolls-Royce vehicles from 2003.

"Expenditure on this wide range of new models will take effect in the second half of the current year, which will see the introduction of Mini One/Mini Cooper and the new BMW 7 series," the company said.

"BMW is confident that even in this period of substantial expenditure on the group's product and brand offensive, the outstanding result achieved in the BMW Automobiles segment in the year 2000 will be reached once again."

The company also said it expected a "significant improvement" in 2001 group results.

Sales increased in all regions. Despite an economic slowdown in Germany, its biggest market, the company managed to deliver 130,437 new cars to customers in the first six months of this year. In the U.S., another economy experiencing slowing growth, sale rose 20.8 percent to 107,257 units.

The company said it would stick with its earlier forecast that sales would rise to 900,000 vehicles this year, up from 822,101 in 2000.

Shares in BMW rose 1.6 percent to 41.05 in early Frankfurt trade.

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