BMW returns to profit in second quarter

FRANKFURT: German luxury car maker BMW said on Tuesday that it had returned to profit in the second quarter of 2009, but posted first-half losses and declined to give a full-year outlook.

BMW said it made a net profit of 121 million euros (174 million dollars) in the three months from April to June, well above an average analyst forecast for a loss of 25 million euros compiled by Dow Jones Newswires.

In the first quarter, BMW had posted a net loss of 152 million euros.

The second-quarter figure, while back in the black, was well below the profit of 507 million euros BMW had posted in the same period a year earlier.

Combined with its loss in the first quarter of this year, BMW recorded an aggregate loss of 31 million euros for the the first half of 2009.

It managed to partially offset a 19.5-percent drop in unit sales to 615,000 vehicles with lowered costs however, in particular for its workforce, and productivity increases.

But owing to "an increasingly competitive environment" and "high volatility of international financial and raw materials markets," the group did not give a precise outlook for all of 2009.

"It is not currently possible to make further quantitative assertions regarding earnings," it said.

BMW repeated that it expected sales to be lower than in the previous year, given that a broad economic recovery was still not in sight, with a pick-up seen in 2010.

Second quarter sales fell by 10.9 percent to 12.971 billion euros, while for the first six months of 2009, they were off by 12.1 percent at 24.48 billion euros.

Core earnings before interest and tax plunged by 60.2 percent to 169 million euros in the quarter and by 90.9 percent to 114 million euros in the first half of the year.

"Consumers are becoming less willing to spend, particularly when it comes to purchasing durable goods. Car markets worldwide are therefore experiencing double-digit downturns," the statement said.

"The situation is such that while some markets are showing signs of slight recovery, others are reacting to the economic crisis with a delayed effect," it added.

Shares in the company fell by 1.08 percent to 32.56 euros in opening trades on the Frankfurt stock exchange, while the DAX index of German blue-chips was 0.44 percent lower overall.