BMW Raises Fiscal Year Guidance for Earnings Metrics
30 September 2021 - 10:18PM
Dow Jones News
By Mary de Wet
BMW AG raised its outlook for certain earnings metrics for the
financial year 2021, predicting higher vehicle prices would
outweigh the chip shortage.
The German auto maker expects its Ebit margin for its automotive
segment to be between 9.5% and 10.5%, up from its previous forecast
of 7% to 9%.
The increase was expected by analysts who, when BMW released the
previous forecast in August, predicted the luxury-car maker would
lift the full-year autos margin to 8%-10% when reporting results
for the third quarter.
BMW said Thursday it expects its return on equity for its
financial services segment to be 20% to 23%, up from 17% to 20%
previously forecast.
"Whilst the semiconductor supply restrictions are expected to
further impact production and deliveries to customers in the coming
months, BMW AG 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
company said.
The auto industry's chip troubles trace back to the early days
of the Covid-19 pandemic, when auto suppliers canceled
semiconductor orders amid weak demand. Consumer-electronics
companies soaked up much of that capacity, leaving car companies
and their parts suppliers with a dearth of chips when car sales
recovered in the summer of 2020.
Further disrupting chip supplies are fresh bottlenecks in how
semiconductors are tested and packaged in Asia. In addition,
semiconductor manufacturers are phasing out the low-tech,
low-margin chips that are prevalent in new vehicles, raising
concerns about the availability of those chips further out.
Consulting firm AlixPartners LLP has said the chip shortage
could lead to $210 billion in lost revenue for the global
automotive industry this year.
(Kim Richters and Mike Colias contributed to this article.)
Write to Mary de Wet at mary.dewet@dowjones.com
(END) Dow Jones Newswires
September 30, 2021 16:03 ET (20:03 GMT)
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