BMW muscles through chip shortage with profit jump
BNN Bloomberg
BMW AG earnings jumped to beat expectations after higher vehicle prices and prioritizing money-spinning models like the US$75,000 X7 SUV helped the company offset output reductions due to the dearth of chips.
BMW AG earnings jumped to beat expectations after higher vehicle prices and prioritizing money-spinning models like the US$75,000 X7 SUV helped the company offset output reductions due to the dearth of chips.
Group earnings before tax surged 50 per cent to 2.9 billion euros (US$3.4 billion) in the third quarter, BMW said Wednesday, compared with an average analysts’ estimate of 2.5 billion euros. The chip supply woes that have hampered the entire industry will remain an issue beyond this year, it said.
“Business during the current financial year to date has benefited substantially from the favorable stable market situation and continued brisk demand,” Chief Financial Officer Nicolas Peter said in the statement.
BMW has navigated turmoil from the chip shortage better than others, and in late September went against the tide of warnings to raise profit expectations. While carmakers have been able to offset much of the crisis with higher prices and swinging output toward their most lucrative models, suppliers like Continental AG have been less fortunate.
The shares were slightly higher in early Frankfurt trading, and have gained 23 per cent since the start of the year.
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