Companies

BMW AG joins Daimler getting boost from auto-sales recovery

Bloomberg | Updated on October 20, 2020

FILE PHOTO: BMW cars at the automobile terminal in the port of Dalian   -  REUTERS

Several markets recovered faster than anticipated, leading to sales growth, and BMW also cut costs during the quarter

BMW AG said its auto business generated more cash than expected last quarter, joining rival Daimler AG in posting surprisingly positive preliminary earnings.

Automotive free cash flow in the three months ended in September was €3.07 billion ($3.6 billion), the Munich-based manufacturer said in a statement late Monday. That’s up from €714 million a year ago and exceeds market expectations.

While BMWs cash-flow performance is clearly positive, earnings seem to be expected broadly in line with current estimates as the carmaker didn’t change its forecasts, Warburg said in a note.

BMW fell 1.1 per cent at 9:12 am on Tuesday in Frankfurt, valuing the company at about €40 billion.

Markets recovering

Also read: The world’s car industry pins hopes on China’s recovery

Several markets recovered faster than anticipated, leading to sales growth, and BMW also cut costs during the quarter. Its initial results and commentary mirror the situation at Mercedes-Benz maker Daimler AG, which reported better-than-expected preliminary earnings and cash flow last week.

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Truckmaker Volvo Group had also posted profit that exceeded analysts’ estimates, and car sales across Europe unexpectedly rose in September for the first time this year.

The company will release complete details on its third-quarter results November 4.

Published on October 20, 2020

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