Bayerische Motoren Werke AG (NASDAQOTH: BAMXF), better known as German automaker BMW, released a preliminary "ad-hoc" summary of its first-quarter results on April 20.
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The results showed a 27% year-over-year jump in pre-tax profit. Here's what investors need to know.
BMW earnings: The raw numbers
BMW won't release its full, audited first-quarter results until May 4. The results released on April 20 are preliminary and incomplete, and could change a bit before the final report.
But here's what BMW told us. All results are shown in euros; as of April 20, 1 euro = $1.07.
|Metric||Q1 2017||Q1 2016||Change|
|Revenue||23.448 billion||20.853 billion||12.4%|
|Earnings before interest and tax (EBIT)||2.646 billion||2.457 billion||7.7%|
|- Automotive EBIT||1.871 billion||1.763 billion||6.1%|
|- Automotive EBIT margin||9%||9.4%||(0.4 ppt)|
|- Motorcycles EBIT||125 million||94 million||32.9%|
|- Financial services EBIT||604 million||591 million||2.2%|
|Pre-tax profit (EBT)||3.005 billion||2.368 billion||26.9%|
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Data source: BMW AG. Figures (except percentages) are in euros; "ppt" = percentage points.
BMW's world headquarters in Munich. Image source: BMW AG.
What drove the 27% jump in pre-tax profit
In its preliminary statement, BMW said that the fat year-over-year increase in pre-tax profit was largely due to three factors:
- A jump in the valuation of HERE, a mapping service jointly owned by BMW and several other companies working on self-driving vehicles. BMW's stake in HERE increased in value (on paper) by 183 million euros after Intel (NASDAQ: INTC) bought 15% of the company in January.
- Year-over-year profit growth at BMW's joint venture with Chinese automaker Brilliance China Automotive Holdings.
- Other "valuation effects" (not detailed) that were worth 122 million euros.
Another key factor driving the year-over-year increase in profit: Sales were up in the first quarter.
- Sales at BMW's automotive unit rose 5.3% in the first quarter, to 587,237, with increases in all regions and for all three of BMW's automotive brands (BMW, Mini, and Rolls-Royce).
- Sales at BMW Motorrad, the company's motorcycle arm, rose 5.5% in the first quarter, to 35,636 units.
BMW reiterated its cautious guidance
BMW reiterated the conservative guidance it gave earlier in the year. It still expects a "slight increase" in full-year pre-tax profit versus its 2016 result, and an EBIT margin for its automotive unit in the range of 8% to 10% for the year.
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