MUNICH, Germany -- BMW AG said Wednesday that it aimed for steady profits this year despite the heavy cost of its biggest new-model launch program, sending its shares accelerating higher.
CEO Helmut Panke said the company would strive to match last year's earnings at the pretax and net levels, although the tense global situation made it difficult to give a more specific forecast.
"Nevertheless, the BMW Group seeks once again to achieve the same overall result this year as in 2002," Panke told the group's annual news conference here, adding that sales of all its brands would rise provided an end to the Iraq crisis came within a "foreseeable" period.
"Launch costs are going to be high and keeping earnings constant under these circumstances is quite an achievement," Sal Oppenheim autos analyst Michael Raab said. "It tells you something about the earnings power of the company."
Raab said BMW's comments were in line with his expectations, while other analysts noted that the group's forecasts tended to be conservative, meaning it could well beat them.
BMW's comments contrasted with Volkswagen AG, which warned this month that operating profit would fall this year if weak demand and unfavorable exchange rates persist, sending its shares tumbling.
The consensus forecast among 19 analysts polled by Multex Global Estimates is for BMW's pretax profit to rise by about 6 percent to 3.5 billion euros ($3.7 billion) in 2003, with net profit up just under 5 percent at 2.115 billion.
BMW has never brought so many new products to market in such rapid succession as it will this year, and finance chief Stefan Krause said the company's profit would be weaker in the first half as development and launch costs continue to weigh.
But he said capital expenditure, which rose 15 percent to just over four billion euros last year, had hit its high point, expecting broadly the same level of spending this year.
A boost in profits is widely expected in the second half of 2003 as BMW unveils its products, which include an updated 5-series car, one of its main profit drivers, a new small X3 SUV and a high-margin 6-series coupe.
Some of the shine was taken off the group's outlook after board member responsible for development, Burkhard Goeschel, told Reuters the new 5 series, key to the group's aim of lifting earnings and sales in the second half, would probably not come to market before September.
The group, as tight-lipped as ever about how profitable individual models are, had previously said production of the new 5 would begin over the summer.
Panke said record sales of the group's Mini brand would help keep overall unit sales flat in the first quarter, but BMW brand sales would slump 8 percent to 215,000 units.
He said sliding sales of the outgoing 5 series, which dropped 11 percent in 2002, combined with a blip in sales of the smaller 3 series as updated coupe and convertible versions hit the market in March, would be behind the first-quarter weakness.
BMW has tripled the number of model ranges it offers since the early 1990s and will have 11 product lines in its portfolio by the year end, from Minis to luxury Rolls-Royces.
"The current model year is a very important milestone in the history of the company," Panke said. "Never before have we introduced as many new models as we will be doing in these 12 months."
Although BMW had not seen any reluctance to buy German products among U.S. consumers angered by Germany's opposition to war in Iraq, Panke said there was a "latent risk" for German companies in the event of a prolonged conflict.
The company's focus on high-margin luxury niches has in the past kept its profits roaring ahead of those of mass-market car producers. Panke said he expected that trend to continue even in difficult market conditions this year.
Krause said BMW's exposure to currency fluctuations was almost completely hedged for 2003, and said he expected no impact on earnings from shifts in exchange rates.
BMW can partly offset the effect of exchange rate swings as its X5 SUV and Z4 sports car are manufactured at its factory in Spartanburg, S.C.
A large chunk of the estimated 150,000 vehicles to be produced there this year will be destined for the U.S. market.
BMW posted a 1.7 percent rise in pretax profit to 3.3 billion euros in 2002, its third record year in a row. Overall net profit climbed 8.3 percent to 2.02 billion euros.