MUNICH -- BMW Group reported an 8.8 percent decline in second-quarter profit as spending on new models including the company's first volume electric car offset higher sales.
Earnings before interest and taxes (EBIT) fell to 2.07 billion euros ($2.75 billion) from 2.27 billion euros a year earlier, BMW said in a statement today. Revenue advanced 1.8 percent to 19.6 billion euros, as car deliveries rose 6.6 percent.
BMW said second-quarter EBIT in its automotive division dropped 13 percent to 1.76 billion euros in line with expectations, due to increased spending on fuel-efficient technology and discounts in embattled European markets.
BMW's second-quarter auto margin declined to 9.6 percent from 11.6 percent a year earlier and compares with a second-quarter operating margin of 9.9 percent at Audi and 6.4 at Mercedes. BMW reiterated that the auto division's profit margin will be in the range of 8 percent to 10 percent of sales this year.
"BMW achieved a strong second-quarter performance despite the headwinds on many automobile markets in Europe," CEO Norbert Reithofer said in a statement, adding that the company's automotive margin was "at the top end of our targeted range."
Reithofer also said 2013 pretax profit will be on the same level as last year's 7.82 billion euros -- even as vehicle sales rise -- because of the company's high levels of expenditure for new technologies and models as well as investment in the company's production network.
BMW CFO Friedrich Eichiner said today that the investments will place a 1 billion-euro ($1.33 billion) net burden on the carmaker's books this year that cannot be offset by cost-cutting. Eichiner said BMW will see its investments rising during the second half of the year.
BMW is counting on new models including the overhauled 5-series sedan, the next generation of the X5 SUV and the 4-series coupe to keep up its sales momentum in the second quarter.