The net profit figure released Tuesday compares to 834 million euros a year ago and easily beat the 1.475 billion euros average estimate from analysts surveyed by FactSet.Revenues in the quarter rose 16.5 percent to 17.9 billion euros, just shy of forecasts.The company turned in fat profit margins, crediting a high-value model mix, with its 5-series sedan and X-3 sport utility showing large sales volume increases. Sales in China rose 52 percent, even as the overall Chinese car market increased by 20 percent, cooling its previous red-hot growth somewhat due to the end of state-sponsored stimulus measures.BMW sold 63,300 cars in China during the quarter, compared to 80,300 at home in Germany. Sales in the important US market also increased.The Munich-based company's results follow strong earnings from other German carmakers. Volkswagen AG and Daimler AG last week also showed sizable profits on sales in China and other emerging markets. Porsche AG, which is merging with VW, on Monday said it made more than a billion euros in operating earnings in the first half of the year.Max Warburton, auto analyst at Sanford C. Bernstein, said the results were "quite simply awesome," citing its profit margin before taxes and interest of 14.4 percent."BMW's margins are so stunning that inevitably the debate will return to the question of 'are we at peak,'" Warburton said.Though Warburton said the second quarter success, which is usually the strongest for the industry, was unlikely to be exceeded for the rest of the year, he saw no reason for earnings to diminish in 2012 and described the company's shares as "profoundly cheap at current levels."BMW shares traded up 2 percent at 69.07 euros in morning trading German time.Like several other German companies this earnings season, the company was cautious about the economy for the rest of the year. It said it is unlikely that growth will be as dynamic as in 2010, given the prospect of higher interest rates around the world and debt troubles in many countries.CEO Norbert Reithofer told journalists on a conference call that "global risks continue to increase, rather than decrease."The company also cautioned that sales and earnings increases in the second half would be held down by model changes and spending on the launch and production start-up of new models such as the second generation of its 1-series compact.BMW says pretax profits should be significantly higher this year than last, though it noted that its prediction was based on continued growth in the world economy.
