Frankfurt: German luxury car maker BMW AG said its second-quarter operating profit rose 26 percent, above forecasts, as new offroad models and strong China sales boosted earnings.
Sales of BMW branded cars rose 8.3 percent to 458,000 cars, a record high, thanks to a jump in sales in China and Europe and the rollout of new models such as the 4-series coupe and the 2-series compact.
Earnings before interest and tax of 2.6 billion euros ($3.5 billion) topped a forecast of 2.23 billion in a Reuters poll of analysts helped by new models, the company said.
"This is a major beat and we remain convinced that the street is underestimating BMW`s medium and long-term earnings power," ISI Group said in a note on Tuesday.
BMW`s automotive EBIT margin, the best gauge to compare profitability with peers, was 11.7 percent, higher than the 7.9 percent achieved by rival Mercedes-Benz Cars and above its own target range of between 8 percent and 10 percent.
"The BMW Group increased sales volume, revenues and Group earnings in both the second quarter and the six-month reporting periods, continuing the successful development of our business," Chief Executive Norbert Reithofer said in a statement.
Munich-based BMW aims to achieve a significant rise in sales volume in 2014 to 2 million or more, after it delivered a record 1.96 million Mini, Rolls Royce and BMW cars in 2013.
BMW also targets a rise in pre-tax profits of up to 10 percent for 2014, the company reiterated.
Last year, BMW led with 1.65 million BMW branded cars sold worldwide, topping Audi at 1.57 million and Daimler in third with 1.47 million Mercedes-Benz-branded cars sold.
