BMW's third quarter hit by initial spending for the development of the electric car

Thomson Reuters

FRANKFURT (Reuters) – German automaker BMW on Wednesday announced a 27 percent drop in operating profit for the third quarter to 1.75 billion euros ($ 2 billion), missing expectations from investors. analysts in the face of exchange rate difficulties and higher research and development expenses.

Analysts in a Reuters poll were averaging a profit before interest and taxes (EBIT) of 1.795 billion euros.

BMW said that despite a slight increase in luxury car deliveries, the automotive division's operational return on sales was down to 4.4 percent from 8.6 percent a year earlier, well below its range. target of 8 to 10%.

Profits were affected by higher raw material prices, currency effects, higher provisions for goodwill and guarantee measures, tariffs between China and the United States, and a war prices in Europe, said the automaker.

Last month, BMW had announced that its pre-tax profit would fall this year, compared to its previous expectations, and that it would reduce its profit margin forecast for cars, charging intense price competition.

($ 1 = 0.8747 euros)

(Report by Edward Taylor, edited by Riham Alkousaa)