BMW surprised investors with news it raised its profit forecast for 2021 to between 9.5% and 10.5% from its previous expectation of a 7 to 9% target, saying improved sales of its high-margin vehicles more than compensated for any semiconductor supply problems.
“BMW confirms that the company is well on track to deliver solid earnings for the second half this year and more importantly for 2022,” said Bernstein Research analyst Arndt Ellinghorst in a research note.
BMW made the announcement in a statement after markets closed Thursday.
“BMW increases the guidance corridor for the EBIT (earnings before interest and tax) margin of the Automotive Segment from between 7% and 9% to between 9.5% and 10.5% for the financial year 2021. Additionally, the guidance corridor for the Return on Equity for the Financial Services Segment is revised from between 17% and 20% to between 20% and 23%,” the company said in a statement.
“Whilst the semiconductor supply restrictions are expected to further impact production and deliveries to customers in the coming months, BMW expects that the continuing positive pricing effects for both new and pre-owned vehicles will overcompensate these negative sales volume effects in the current financial year,” the statement said.