BMW third-quarter hit by upfront expenditure for electric car development
The BMW logo is seen on the second press day of the Paris auto show, in Paris, France, October 3, 2018. REUTERS/Regis Duvignau
FRANKFURT (Reuters) - German carmaker BMW (BMWG.DE) on Wednesday reported a 27 percent drop in third-quarter operating profit to 1.75 billion euros ($2.00 billion), missing analyst expectations amid currency headwinds and higher research and development expenses.
Analysts in a Reuters poll had on average expected earnings before interest and taxes (EBIT) to come to 1.795 billion euros.
BMW said that despite a slight rise in deliveries of luxury cars, its operating return on sales for the automotive division narrowed to 4.4 percent from 8.6 percent a year earlier, well below its targeted range of 8 to 10 percent.
Earnings were hit by higher raw material prices, currency effects, higher provisions for goodwill and warranty measures, tariffs between China and the United States and a price war in Europe, the carmaker said.
Last month BMW warned its pretax profit would fall this year, against earlier expectations for a flat outcome, and cut its profit margin guidance for cars, blaming intense price competition.
($1 = 0.8747 euros)
Reporting by Edward Taylor, editing by Riham Alkousaa
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