BMW Q2 profit exceeds expectations

German top-of-the-range car maker BMW posted a higher-than-expected increase in second-quarter net profit on Thursday despite a weak European market. Net profit rose by nine percent to 1.4 billion euros ($1.9 billion) for the period compared to a year earlier, exceeding the 6.1 percent rise forecast by analysts polled by Dow Jones Newswires. Sales, on the other hand, which rose by 1.8 percent to 19.5 billion euros, were slightly lower than forecast, while underlying or operating profit, as measured by earnings before interest and tax (EBIT), dropped. The group said investment in new technology, higher personnel costs and greater competition led second-quarter EBIT to slip 8.8 percent to 2.1 billion euros. "The BMW group achieved a strong second quarter performance despite the headwinds on many automobile markets in Europe," chief executive Norbert Reithofer said in a statement. BMW said weak European markets and higher competition would continue to provide challenges in the second half of the year but it was sticking to its 2013 targets. "We continue to target sales volume growth for the full year in the single-digit range and hence a new sales volume record," Reithofer said. "Due to high levels of expenditure for new technologies and models as well as investment in the production network, we continue to predict a group profit before tax for 2013 on a similar scale to 2012," he added.