BMW Reports Q1 Profit Drop Amid Weak Sales, Maintains Outlook

BMW sees a 26.4% drop in profit and revenues by 7.8%. Despite the downturn, the company maintains a positive outlook for fiscal 2025, anticipating sales growth and a rise in electric vehicle deliveries.

Date: 07-05-2025

AI Rating: 5

Profit and Revenue Decline
BMW Group reported a significant decline in first-quarter net profit, which fell by 26.4% year-over-year to 2.17 billion euros, accompanied by a notable drop in earnings per share (EPS) from 4.42 euros to 3.38 euros. This decline in EPS, falling 23.5%, coupled with a decrease in revenues by 7.8% to 33.76 billion euros, raises concerns among investors regarding the company's short-term profitability and market performance.

The company's pre-tax earnings (EBT) also decreased, down by 25.2% year-over-year. The EBT margin diminished from 11.4% to 9.2%, indicating that the profitability relative to its revenue is under pressure.

However, despite this less favorable outlook for the current fiscal year, the company has reiterated its guidance for fiscal 2025, expecting slight sales growth, driven by an increase in fully-electric vehicle deliveries. The forecast for Automotive segment EBIT margin remains reasonably steady, suggesting some confidence amidst the backdrop of declining profitability. The projected EBIT margin ranges between 5.0% to 7.0%, slightly lower than the previous year's margin but within an acceptable bracket given market conditions.

The company’s view on stabilizing inflation and moderated interest rates presents a cautiously optimistic scenario, potentially bolstering demand across several markets in 2025. However, there are concerns about permanent tariffs' effects, particularly in the U.S. market, which may add to inflationary pressure.

Given these insights, while the profit and revenue decline initially appear negative, BMW's steady outlook for the upcoming fiscal period creates a level of reassurance for investors. The potential growth in electric vehicle sales is particularly noteworthy as the auto sector shifts towards greener technologies.

Stocks: BMW BAMXF BAMXY