German luxury car maker BMW AG said its second-quarter operating profit rose 26 percent, above forecasts, as new off-road models and strong China sales boosted earnings. Sales of BMW branded cars rose 8.3 percent to 458,000 cars, a record high, thanks to a jump in sales in China and Europe and the rollout of new models such as the 4-series coupe and the 2-series compact.
Earnings before interest and tax of 2.6 billion euros ($3.5 billion) topped a forecast of 2.23 billion in a Reuters poll of analysts helped by new models, the company said.
"This is a major beat and we remain convinced that the street is underestimating BMW's medium and long-term earnings power," ISI Group said in a note on August 05.
BMW's automotive EBIT margin, the best gauge to compare profitability with peers, was 11.7 percent, higher than the 7.9 percent achieved by rival Mercedes-Benz Cars and above its own target range of between 8 percent and 10 percent.
"The BMW Group increased sales volume, revenues and Group earnings in both the second quarter and the six-month reporting periods, continuing the successful development of our business," Chief Executive Norbert Reithofer said in a statement.
Munich-based BMW aims to achieve a significant rise in sales volume in 2014 to 2 million or more, after it delivered a record 1.96 million Mini, Rolls Royce and BMW cars in 2013.
BMW also targets a rise in pre-tax profits of up to 10 percent for 2014, the company reiterated.
Last year, BMW led with 1.65 million BMW branded cars sold world-wide, topping Audi at 1.57 million and Daimler in third with 1.47 million Mercedes-Benz-branded cars sold.