BMW 5-Series Boost Profits in Q2 of 2011

With a little help from the 5-Series, BMW has managed to increase its per-car profit in the second quarter, while keeping on track with the rest of its figures for the rest of the year. The BMW Group has again achieved sales volume, revenues and earnings records in the second quarter 2011. Group revenues rose by 16.5 percent to €17,888 million, while profits jumped in the second by 66.3 percent to €2,856 million.

Those figures might not seem as important in a world of constant sales increases, but Bloomberg says BMW “outshined” the rest of its luxury rivals when it the profit margins - an almost unheard of 14.4 percent of sales. Audi only managed 11.8 percent, while Mercedes got 10.7 percent profits out of its sales.

“For an analyst who’s covered BMW for 11 years it’s amazing to see this level of earnings,” said Max Warburton, a London-based Sanford C. Bernstein analyst who put an Outperform rating on the stock. “At no point in the past would it have been imaginable that this company could make margins of this level.”

“In view of strong demand for the new BMW 5, 6 and 7 Series and for its successful X models (the BMW X1, X3, X5 and X6) and thanks to greatly improved cost efficiencies, the BMW Group now expects that its full-year performance will be significantly better than originally forecast. For this reason, the earnings and sales volume forecasts for the full year were raised in mid-July,” the Bavarians say, sounding very confident that they will meet their goals for the year.

With global demand peaking, BMW looks more likely to have problems meeting demand than getting a profit out of performance-hungry petrol-heads.