The Bavarian automotive group earned surprisingly more than expected in the first quarter. Before taxes, BMW posted a profit of 3.76 billion euros. After significantly weaker figures last year, this quarterly report clearly exceeded expectations.
Particularly with the car division, earnings were again very strong. While Q1 2020 profit was €229 million, this year Q1 profit was €2.2 billion.
With the key data, BMW also gave an insight into its financial situation, which had been severely strained during the crisis – but which BMW, like the other carmakers, had already got under control in the second half of 2020. From January to the end of March, 2.5 billion euros flowed into BMW’s cash flow (free cash flow) from the car business, after BMW had to record an outflow of 2.2 billion euros here a year ago.
After Daimler’s strong preliminary results last week, BMW’s numbers were no longer a big surprise, analysts at Bank of America said. However, the early presentation of the figures is positive in any case. Goldman Sachs expert George Galliers pointed to strong financial cash inflows, and operating profit in the auto division was also significantly higher than the average of analysts‘ estimates. However, some investors – like himself – had expected a double-digit operating margin in the core business.
Fundamentally, things are looking good for BMW.
For more updates, follow us on Twitter: @JRC_Capital
