BMW profit margin comes in second to VW's Audi

Reuters - German premium carmaker BMW reported a record profit margin in its core cars business for 2011 that nonetheless fell short of matching the result of close rival Audi.

BMW's Automobiles segment boosted earnings before interest and tax (EBIT) as a percentage of revenue to 11.8 percent versus 8.0 percent a year before, but missed the 12.1 percent achieved by VW's premium brand.

Analysts had forecast an EBIT margin in Automobiles of 11.9 percent for the full year.

"It's the first mild disappointment in quite a few quarters," Credit Suisse analyst Arndt Ellinghorst said, citing an implied quarterly Autos margin of 9.2 percent versus his expectation of 9.8 percent.

"But I believe there's been a lot of kitchen-sinking in order to keep the momentum going for 2012 and surprise the market with earnings growth," he added.

Thanks to record profits, BMW will hike its cash payout to stockholders by a full euro to 2.30 euros per share, which translates to a dividend yield of about 3.3 percent.

Shares in BMW gave up some of their gains following the results. As of 1046 GMT, BMW was trading 1.3 percent higher, lagging a 2.8 percent gain in the automotive sector.

BMW will publish its full accounts and is expected to give a forecast for earnings this year during its annual news conference on March 13.

The company has long targeted achieving a sustainable EBIT margin of 8-10 percent in its cars business starting 2012.

Chief Executive Norbert Reithofer reaffirmed in a statement on Thursday that BMW planned to grow sales above the 1.67 million vehicles sold to customers last year.

"We expect the past year's record-breaking sales volume performance to be surpassed in 2012," he said.