BERLIN, Nov 4 (Reuters) – BMW’s (BMWG.DE), pre-tax earnings fell in line with expectations in the third quarter with hefty restructuring charges looming towards the end of the year, forcing another cut to its outlook as it grapples with the weak China market.
The German car maker reported quarterly pre-tax earnings of €2.1 billion ($2.36 billion), falling 11% on the previous year, as forecast by analysts in a company-provided consensus.The operating margin in BMW’s core automotive business narrowed to 3.4%, beating analysts’ forecast of 3.1% but down from 5.2% a year earlier.
“Current developments in our industry call for decisiveness and swift implementation. We will therefore specifically intensify and accelerate structural measures,” CEO Milan Nedeljkovic said.
BMW scrapped its profit guidance on Tuesday evening for the second time in less than five months, now forecasting a core operating margin of between -0.5% and 0.5% this year, crashing from the double digits it posted five years ago.
The adjustment was linked to costs expected in the fourth quarter from a restructuring programme, including 8,000 layoffs in Germany.The company said it plans to leverage momentum for the programme to reduce management functions faster.
($1 = €0.8905)
Reporting by Rachel More, editing by Thomas Seythal
