BMW's 2Q net slides, dumps profit forecast

BERLIN: Germany automaker BMW saw second-quarter net profit slide nearly 33 percent and abandoned its yearly profit forecast Friday, blaming a drop in U.S. sales, rising costs for raw materials and the strong euro.

The Munich-based company, the world's biggest maker of luxury cars, earned euro507 million (US$791.5 million) in the April-June period, down 32.7 percent from the euro753 million it earned last year. Sales fell half a percent to euro14.6 billion (US$22.8 billion) in the quarter compared with euro14.7 billion a year earlier.

``Business conditions for the automobile industry deteriorated sharply again in the second quarter due to further ongoing steep rises in oil and raw material prices, the weakness of the U.S. dollar, the impact of the international financial crisis and a weaker US economy,'' the company said in a statement accompanying the earnings, which were not due to be released until later this month.

The company revised its earnings forecast, blaming unfavorable market conditions. ``We now expect that the pretax return on sales for the year to be at least 4 percent,'' Chief Executive Norbert Reithofer said.
That sent BMW shares plunging more than 10 percent before they recovered slightly to euro26.53 (US$41.42), or down 8.3 percent.