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BMW Q2 EPS falls 29% YOY; FY'19 guidance confirmed

Bayerische Motoren Werke AG on Aug. 1 reported a 29% year over year drop in EPS for the second quarter, despite achieving its highest-ever sales during that period, and maintained its outlook for full year 2019.

For the three months to June 30, BMW reported earnings per common stock of €2.21, below the €2.55 consensus mean estimate compiled by S&P Global Market Intelligence and down from €3.12 in the year-ago period.

Sales climbed 1.5% to 647,504 vehicles, a record for the second quarter, which the company attributed to the contribution of its BMW Brilliance Automotive joint venture in China. BMW said it achieved an 11.8% increase in sales in China during the quarter, a market where many automakers have been suffering sharp declines.

Group revenue rose 2.9% to €25.72 billion from €24.99 billion in the same quarter of 2018. EBIT fell 19.6% to €2.20 billion from €2.74 billion, corresponding to an EBIT margin of 6.5%.

BMW said it was on track to meet its full-year guidance, which it cut in May due to a higher-than-expected €1.4 billion provision for the settlement of antitrust proceedings brought against it by the European Union. The German carmaker reduced its forecast EBIT margin to a range of 4.5% to 6.5% compared with its original guidance of 6% to 8%.

The company in April said it had made a provision of about €1 billion in response to antitrust proceedings the European Union has brought against it, Daimler AG and Volkswagen AG for having allegedly colluded to slow the development of technologies that would help reduce air pollution from cars.

In its earnings release, BMW also cited intense competition and higher manufacturing costs as headwinds. It said it is allocating larger amounts for developing electric powertrains and research on autonomous vehicles, an area in which it announced on July 4 that it would join forces with Daimler.

BMW CEO Harald Krüger will step down from the role in August. He will be replaced by Oliver Zipse, head of production.

In morning trading, BMW shares were up 1.2%, or 78 cents, at 67.61.