FRANKFURT -- BMW posted a slip in 2003 sales on Tuesday as the weak dollar dented revenues, but the fall was less than some had expected and shares in the German firm rose as it stuck to its profit goal.
"Group earnings for 2003 will match the previous year's level," BMW boss Helmut Panke said in a letter to shareholders, repeating the company's target for the year just ended.
Revenues fell 2.1 percent last year to 41.525 billion euros ($52.26 million) but were up more than four percent once adjusted for the impact of currency fluctuations, BMW said.
The euro surged to record highs versus the dollar earlier this month, raising concerns that top European exporters such as carmakers could see the value of some overseas sales eroded.
The U.S. became BMW's largest market during last year but analysts said that, for the time being, BMW profits look relatively well insured against currency moves due to hedging.
"BMW is already mostly hedged for the current year," said Georg Stuerzer, analyst at HVB Group in Munich. "2005 will be more difficult though."
Monday's sales figure was nonetheless slightly more than the average forecast of analysts who according to Reuters Research had expected a sales number of 41.15 billion euros.
"During a phase of significant expenditure for the Group's product and market offensive, this is clear evidence of the underlying strength of the BMW Group," Panke said.
The group, which saw profits hit in the first half of 2003 by development costs for new models including the X3 compact sports utility vehicle and the 6-series coupe, said capital expenditure last year rose 5.2 percent to 4.25 billion euros.
Having tripled the size of its model range since the early 1990s and added the Mini and Rolls-Royce names to its line-up, BMW repeated that it expects to sell more of all three brands in 2004 after selling a record 1.1 million cars last year.
Although BMW is still slightly smaller than its arch rival Mercedes, it is growing faster than the DaimlerChrysler luxury brand, which expects flat sales this year after a 1.3 percent dip in 2003 to about 1.22 million vehicles.
Munich-based BMW also said that it still expects 2003 pretax profits to match 2002's level of 3.3 billion euros.
"It's significant that BMW confirmed its outlook and BMW shares should profit from that today," said Michael Punzet, analyst at Landesbank Rheinland-Pfalz.
"As far as the euro region is concerned, however, it is doubtful whether the gradual recovery seen in this region will provide the necessary momentum to bring about robust economic growth," the firm said.
Some were a little disappointed though that BMW had not given a more concrete outlook for its own year ahead.
"I'm a bit surprised that the shares are up given the rather cautious view for 2004," said one London-based analyst. "All these new models should continue to drive earnings growth but there's no 2004 profit goal from the firm."
As well as the X3 and 6-series models, BMW is also planning to launch its 5-series Touring estate car, an all-new BMW 1-series and a Mini cabriolet this year.