BMW warns of challenging second half as Q2 earnings drop

BMW warned of challenges in the second half from inflation and gas shortage fears to ongoing supply chain bottlenecks, predicting a drop in deliveries for the full year but keeping its outlook of 7-9% for the automotive margin, Reuters reports.

Higher pricing and strong demand on the used car market should partially offset the effects of lower output, the premium carmaker said.

Still, it added a note of caution that tightening sanctions on Russia, interruption of gas supply or the possibility of the war in Ukraine spreading were not factored into its forecast.

The Munich-based carmaker reported a 31% drop in second-quarter earnings before interest and taxes to 3.4 billion euros ($3.46 billion) despite growing revenues, still beating a 3.13 billion euro forecast in a Refinitiv poll of eight analysts.

The consolidation of its China joint venture BMW Brilliance Automotive pushed up revenues in the first half but dampened second quarter earnings, BMW said, reporting an automotive margin of 8.2%, down from last year’s 15.8%.

The premium carmaker, which last year delivered more cars than ever at 2.52 million, had previously expected to match that output this year but now expects a slight fall, it said, with deliveries down nearly a fifth in the second quarter.