BMW AG gives a tepid outlook for the auto markets. BMW predicts that the euro would stay strong after third-quarter earnings before interest and tax (EBIT) dropped 86% to 55 million euros (about $80.5 million). Recently, BMW’s shares fell 6.2%, making it the biggest decliner in the DJ Stoxx European car sector index, which was down 3.5%. Analysts don’t have much confidence in the stock of the world’s biggest maker of premium cars. They cited dismal third-quarter results; its core automobiles business lost 76 million euros ($112.3 million) before interest and tax in the quarter. DZ Bank analyst Michael Punzet said that his firm’s negative view on BMW came from the several risks BMW is exposed to from currencies, especially euro/sterling. He also sees lower residuals in the future. Nonetheless, BMW still expects positive 2009 earnings because of cost cuts even as its repeated sales volume is set to fall 10% to 15%. In a statement, CEO Norbert Reithofer stated that it expects that markets will make a gradual recovery over the coming year.
