BMW Q1 profits beat as SUV sales take off

The company cited continued growth in Europe, North America and China and a 30% jump in deliveries of the X5 sports utility vehicle

German carmaker BMW AG said its first-quarter operating profit rose by a forecast-beating 20.6 percent, lifted by strong demand for large offroaders in Europe and the United States and continued albeit slower growth in China.

Earnings before interest and tax (EBIT) came in at 2.52 billion euros ($2.83 billion), above the 2.191 billion euros forecast in a Reuters poll.

Shares in BMW were indicated up 2.3 percent at brokerage Lang & Schwarz ahead of the 0700 GMT Frankfurt market open.

BMW said on Wednesday its automotive EBIT margin was 9.5 percent in the quarter, remaining at a similar level to the year-earlier quarter and at the upper end of its target range of between 8 percent and 10 percent thanks to record sales of high-margin SUVs in the quarter.

By contrast, the quarterly return on sales from ongoing business at rival Mercedes-Benz Cars jumped to 9.2 percent from 7 percent a year ago, while Audi's operating margin slipped to 9.7 percent from 10.1 percent.

First-quarter BMW brand sales were up 5.4 percent at 451,576 cars, the Munich-based automaker said, citing continued growth in Europe, North America and China and a 30 percent jump in deliveries of the X5 sports utility vehicle.

BMW reiterated it expected record sales and profit before tax this year thanks to a the launch of 15 new or upgraded Rolls-Royce, Mini and BMW models.

Automotive segment revenues are forecast to grow "significantly" due to the increase in sales volume and exchange rate factors, BMW said. The company had previously expected a "solid" growth in revenues.

BMW however cautioned that some regions continue to be difficult.

"The situation on the Russian automobile market, for instance, is likely to remain difficult. The ongoing process of normalisation of the Chinese automobile market is also likely to continue, resulting in less dynamic growth," BMW said.