BMW AG (BMW.XE) said Thursday that second-quarter earnings were weighed down by higher investments in electric and automated vehicles, as well as currency effects and raw-materials prices, but the premium car maker remained largely unfazed by new emissions rules and escalating trade disputes that have troubled its German peers Daimler and Volkswagen.
Chief Executive Harald Krueger said BMW was almost done with the changeover to a new emissions testing standard that has turned into a major headache for rivals Volkswagen AG (VOW.XE) and Daimler AG (DAI.XE).
Mr. Krueger said its leading position in the matter should give BMW opportunities to increase sales over the second half of the year.
Volkswagen Chief Executive Herbert Diess warned yesterday that the car maker's biggest challenge this year would be getting its cars compliant with the Worldwide Harmonized Light Vehicle Test Procedure emissions standard, or WLTP, which comes into effect i Europe on Sept. 1.
Volkswagen and Daimler have both said that the new emissions rules will likely lead to limited availability of some models and impact earnings.
"Since we integrated the WLTP switch into our production and sales planning early, we are able to offer our fleet customers the same wide range of products as usual," Mr. Krueger said.
BMW said net profit for the period was 2.06 billion euros ($2.41 billion), down 6.4% from EUR2.2 billion a year earlier, while revenue fell 2.9% to EUR25.02 billion. Analysts polled by FactSet had expected net profit of EUR2.02 billion and revenue of EUR25.15 billion.
In the automotive segment, BMW's closely-watched EBIT margin fell to 8.6% in the quarter from 10.1%.
"This is a refreshingly clean and unspectacular result in a reporting season where BMW's peers are experiencing major volatility," said Arndt Ellinghorst at Evercore ISI.
Car manufacturers have also been facing Chinese tariffs on U.S.-made vehicles, as well as higher raw-material prices due to U.S. tariffs on steel and aluminum imports.
The Chinese levies have led BMW to raise prices for SUVs it imports to China from the U.S. The car maker's largest plant worldwide is located in Spartanburg, South Carolina. But BMW said Thursday that more than 80% of the vehicles it sells in China are produced locally and it has started shipping some SUVs from Thailand to bypass import duties.
"We are systematically addressing the challenges resulting from the current geopolitical environment. Volatility has become a given in our business," said Chief Financial Officer Nicolas Peter.
The company confirmed its full-year guidance, expecting revenue and deliveries to grow slightly and targeting pretax profit equivalent to last year's. BMW continues to forecast an EBIT margin of between 8% and 10% for its automotive segment.
"Of course, these goals assume that economic and political conditions will not worsen any further," Mr. Krueger said.
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