By Edward Taylor
FRANKFURT (Reuters) - Record sales of SUVs helped German carmaker BMW AG
Shares in the world's biggest luxury automaker rose as much as 1.7 percent in early Wednesday trading, with analysts saying the 21 percent rise in operating profit could help to quell concerns BMW is losing ground to rival Daimler
"Whilst the market has been focused on BMW's weak product momentum, poor import sales into China and overall China headlines, the company once again printed a very strong quarter," said Evercore ISI analysts. They have a "buy" rating on BMW shares.
Earnings before interest and tax (EBIT) came in at 2.52 billion euros ($2.83 billion), beating analysts' average estimate of 2.19 billion euros and helped by a double-digit million euro gain from derivatives used to hedge currency moves.
BMW's automotive EBIT margin was 9.5 percent in the quarter, remaining ahead of Daimler's Mercedes-Benz, and at the upper end of its target range of 8-10 percent, thanks to record sales of high-margin sport-utility vehicles (SUVs).
By comparison, the quarterly return on sales from ongoing business at Mercedes-Benz was 9.2 percent, while Audi's
The launch of BMW's new 7-series, a face-lift for the 3-series and the new 5-series could help sales going forward.
BMW brand sales were up 5.4 percent in the quarter to 451,576 cars, the Munich-based automaker said, citing continued growth in Europe, North America and China, and a 30 percent jump in deliveries of the X5 SUV.
BMW reiterated it expected record sales and pretax profit this year thanks to a the launch of 15 new or upgraded Rolls-Royce, Mini and BMW models.
Automotive revenues are forecast to grow "significantly" due to rising sales volumes and exchange rate factors, BMW said. The company had previously flagged "solid" growth in revenues.
Chief Financial Officer Friedrich Eichiner said he expected a mid triple-digit-million euro windfall in 2015 from fair-value gains on derivative contracts used to hedge currency swings and commodity price fluctuations.
BMW also said its research and development spending ratio would climb back to 5.0-5.5 percent of revenues by year end, after falling to 4.4 percent in the quarter from 5.4 percent in the same period last year.
The company cautioned some regions continued to be tough.
"The situation on the Russian automobile market, for instance, is likely to remain difficult. The ongoing process of normalisation of the Chinese automobile market is also likely to continue, resulting in less dynamic growth," it said.
(Editing by Georgina Prodhan and Mark Potter)
