After strong quarterly results, BMW raised its profit forecast for 2021 today, but warned that the global semiconductor chip shortage and climbing prices of raw materials would impact its performance in the second half of the year.
The German carmaker company posted a better-than-expected profit for the second quarter.
The company inflicted some loss in the same period in 2020 when it was pummeled by the coronavirus pandemic.
BMW profit forecast
“Our performance has benefited from strong customer demand during the first half of the year, enabling us to achieve significant growth,” Chief Executive Oliver Zipse said in a statement.
“However, in light of a number of prevailing risks, including raw materials prices and a shortage of semiconductors, the second six-month period is likely to be more volatile for the BMW Group”
BMW said it now expects a full-year operating margin for the automotive segment in a range from 7% to 9%.
The operating margin of its previous forecast was of a range from 6% to 8%.
BMW posted a net profit for the quarter of 4.8 billion euros ($5.7 billion), versus a loss of 212 million euros for the same quarter in 2020.
Analysts on average had expected net income of 2.2 billion euros for the second quarter, according to Refinitiv estimates.
The entire auto industry is struggling with a shortage of semiconductors used for vehicle electronics.
Auto sales for 2020 are expected to come in at around 14.5 million, according to industry analysts.
This number is would be down 15% from the 2019, when the sector sold a total of 17.1 million vehicles.
“What looked like the most horrible year for the industry turned out really well,” said Jack Hollis, senior vice president of automotive operations at Toyota Motor North America.
The rollout of the vaccine should bolster consumer activity and “enable consumers and businesses to return to a more normal range of activities, lifting the job market, consumer sentiment and auto demand,” General Motors Chief Economist Elaine Buckberg said in a statement.
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