BMW first-quarter profit edges up on sales jump, lower taxes

BERLIN AP reported that German carmaker BMW said Tuesday its profit edged higher in the first quarter as the launch of the revamped Mini compact and 7-series limousines gave sales a boost and the German company faced a lower tax bill.

Net profit rose 3.8 percent to 632 million euros ( $579 million) in the first three months of the year, from 609 million euros in the year-earlier period. Sales jumped 14 percent to 10.77 billion euros ( $9.87 billion) from 9.45 billion euros.

Luxury carmakers have been largely spared the impact of a downturn in demand afflicting mass-market manufacturers, with BMW faring particularly well. Rival DaimlerChrysler AG said last month that first-quarter operating profit at its Mercedes-Benz division, its best performer, slipped 3 percent.

BMW forecast said the results made it more optimistic of improvement in full-year sales and earnings, though set no financial targets.

"In 2002, for the first time, there is the chance to sell more than 1 million cars," chief executive Joachim Milberg said in a statement.

In 2001, sales of BMW's pricey sedans rose 10 percent on the previous year to 905,653 units, lifting revenue to 38.5 billion euros ( $35.3 billion). Net profit jumped to 1.87 billion euros ( $1.71 billion) after it ended its disastrous investment in Britain's Rover.

Munich-based BMW's shares fell 1 percent to 44.11 euros ( $40.40), putting them among the strongest stocks on Germany's blue-chip DAX index, which had weakened by more than 2 percent by midday Tuesday. Shares in DaimlerChrysler were down 3 percent at 50.01 euros ( $45.81).

BMW delivered 260,462 cars to customers in the first three months, a 17 percent increase. That included 27,691 of its new-look Mini, which was launched last July, and 11,461 of the company's most expensive 7-series cars.

More 7-series models and a successor to its Z3 sports car are to follow this year, with the latter going on sale first in the United States.

First-quarter profit was also boosted by a lower tax bill, which fell to 379 million euros ( $347 million) from 421 million euros, and rising earnings at its financial services and motorcycle divisions.

The figures set the stage for an upbeat exit by Milberg, who is due to step down after next week's shareholder meeting after successfully refocusing the company on the luxury market. Milberg is to be replaced by finance chief Helmut Panke.