EU: BMW hurts as US$1.8B is set aside for possible EU fine

BMW’s first-quarter operating profit fell 78% to €589 million (US$658.4 million), reported Reuters. This was not helped by BMW being compelled to set aside €1.4 billion (US$1.6 billion) to cover a possible fine from EU antitrust authorities.

The European Commission last month told German carmakers they face hefty fines for alleged collusion in the area of emissions filtering technology. BMW denies participating in antitrust activities and is contesting the allegations.

BMW’s first-quarter earnings before interest and taxes were below the €666 million (US$744.3 million) forecast in an analyst poll. A contribution of €648 million (US$724.2 million) from financial services only partially offset a €310 million (US$346.5 million) loss before interest and taxes at the automotive division.

Analysts said BMW’s results were underwhelming; “As most companies have done, BMW points towards a stronger second half this year. We remain skeptical regarding this optimism as we don’t see much stronger end-markets,” analysts at Evercore ISI said, citing trade tensions and emissions rules as risks.