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BMW drives Q3 profit up 78 per cent, raises outlook

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Luxury automaker BMW AG saw its third-quarter net profit leap 78 per cent, driven by increased sales, and raised its sales outlook for the rest of 2007 on Tuesday.

The Munich-based automaker earned 803 million euros (US$1.2 billion) in the July-September period compared with 452 million euros a year earlier.

Sales at BMW, which also makes the Mini, the Rolls-Royce and high-end motorcycles, climbed 19 per cent to 13.78 billion euros ($19.96 billion).

Despite some market worries about the company's exposure to the falling U.S. dollar, BMW said it was ``well on its way toward achieving its earnings and sales volume targets for the full year.''

``The BMW Group will focus its attention on profitability and increasing value over the long term,'' said chief executive Norbert Reithofer.

Pretax profit rose 6.3 per cent to 765 million euros ($1.1 billion), up from 720 million euros a year earlier.

``BMW's numbers mark a slightly better performance after a very disappointing year so far, with at least some of the top-line strength feeding through into earnings growth,'' said auto analyst Stephen Cheetham at Sanford C. Bernstein Ltd.

``However, apart from higher net income due to lower taxes, the numbers came in below our estimates, and do little to dispel investor fears of the company's continued exposure to a weaker U.S. dollar.''

The euro currency hit another new high Tuesday, but BMW said it did not expect the negative impact to be bigger than the 666 million euros it posted in 2006.

``All of the main currencies are fully hedged for the business year 2007,'' the company said, adding it had been ``confronted with higher purchase prices for steel, precious metals and other materials.''

Cheetham said markets would likely take a ``wait and see approach'' to the company, and BMW shares fell 4.5 per cent in Frankfurt.

In terms of sales, the company said it saw strong demand in all markets, including the United States, and it expects to sell more than 1.4 million cars this year. Reithofer said BMW hopes to sell more than 1.8 million vehicles a year by 2012.

Third-quarter sales rose 13 per cent to 364,564 vehicles.

The company recently introduced its new 6-Series coupe and
convertible and its new Mini Clubman is expected to go on sale
worldwide later this month.

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BMW drives Q3 profit up 78 per cent, raises outlook
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