BMW Q1 profit falls 26.4% on weak China sales, 2025 outlook held
German carmaker BMW reported a 26.4% drop in first-quarter net profit to €2.2 billion ($2.5 billion), as weak demand in China weighed on earnings.
Revenues fell 7.8% to €33.8 billion as global vehicle deliveries dropped 1.4% to 586,000 units, driven by a decline in China amid intense market competition.
"Given the sustained demand for its attractive premium vehicles, the BMW Group is able to confirm its guidance for the year," the company said in a statement.
However, it added that due to the volatile developments and ongoing negotiations around US President Donald Trump's new tariff policy, the potential impact of tariffs in 2025 can "only be estimated, based on assumptions."
Despite the sharp profit decline, BMW performed better than domestic rivals: Mercedes-Benz reported a 43% profit drop to €1.7 billion, while Volkswagen, Germany's top carmaker, posted a 41% profit decline to €2.2 billion.
"Stable financial performance and effective cost management characterized the first quarter despite the challenging
environment," chief financial officer Walter Mertl said, adding that BMW will continue to optimize its efficiency and cost structures.
Industry sentiment remains poor, with the ifo Institute's business climate index for the automotive sector deep in negative territory. Export expectations have fallen and companies see their global competitiveness outside the EU worsening.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
8 minutes ago
- Yahoo
Should You Buy the Post-Earnings Dip in Under Armour Stock?
It has been a rocky season for sportswear makers caught in the ever-shifting tariff crossfire of President Donald Trump's administration. Under Armour (UAA) is taking some heavy hits. Back in April, the Maryland based firm, famed for its high-performance athletic gear, joined 75 other companies urging Washington to spare footwear from reciprocal tariffs, warning the hit would land squarely on consumers. Under Armour sources roughly 30% of its products from Vietnam and 15% from Indonesia, both of which are now facing steep U.S. levies. That exposure could mean millions of dollars in added costs this year alone. A year into its restructuring plan, sales remain soft, margins are under pressure, and demand has yet to rebound. Supply-chain snags and potential price hikes are adding more friction to Under Armour's recovery push. More News from Barchart Why This Cannabis Penny Stock Could Be Wall Street's Next Meme Trade Breakout Apple Stock Is Gaining Momentum, Is AAPL Stock a Buy? Peter Thiel-Backed Bullish Is About to IPO. Should You Buy BLSH Stock? Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! Plus, last week's first-quarter earnings report only added to the pressure — shares sank in the high teens as management struck a cautious tone, warning that tariffs are expected to squeeze margins and slash profitability by roughly half in the current fiscal year. So, is this post-earnings selloff a golden buying opportunity, or a trap for bargain hunters? About Under Armour Stock Under Armour, founded in 1996, sprinted from a small idea to a global sportswear force, crafting gear built to make athletes better. From compression tees to loose-fit hoodies, running shoes to cleats, and gloves to backpacks, it blends innovation with style. Beyond apparel, it plays in footwear, accessories, and digital ventures, currently boasting a $2 billion market capitalization. Shares of the sports apparel maker have been getting hammered lately, hitting a low of $4.83 on Aug. 12 — just a hair above its 52-week low of $4.62 in April. Shares of Under Armour are down 23% for the past five days, leaving UAA stock 54% below its 52-week high of $10.62. Over the past 52 weeks, UAA stock has declined 37%. The RSI recently slid into oversold territory near 26, hinting at exhaustion, while volume exploded past 61 million shares on Aug. 8, a sign of heavy pressure that could either mark capitulation before a rebound or an indication that the bears still have the upper hand. Under Armour Dips After Its Q1 Earnings Report Last Friday, the athletic gear maker released its Q1 2026 earnings report — solid in some spots, shaky in others — and Wall Street sent UAA stock sliding over 18%. Revenue came in at $1.1 billion, down 4% year-over-year (YOY), but still a hair above Wall Street's expectations. North America, its biggest market, declined by 5% annually, while international revenue slipped 1%. Digging deeper, EMEA revenue rose 10%, Asia-Pacific sank 10% annually, and Latin America tumbled 15%. Meanwhile, wholesale revenue dropped 5% and direct-to-consumer sales slid 3%. Within that, owned stores sales inched up 1% but e-commerce sales cratered 12%, now just 31% of the DTC mix. By product category, apparel dipped by 1%, footwear plunged by 14%, and accessories climbed 8%. Margins weren't all bad news. Gross margin improved 70 basis points (bps) to 48.2%, helped by 'favorable foreign exchange, pricing, and product mix,' partially offset by channel mix issues and higher supply-chain costs. Meanwhile, adjusted EPS landed at $0.02, missing estimates, while adjusted operating income tripled to $24.4 million. The company's cash reserve is stronger now, with $911 million in cash and equivalents. For Under Armour's ongoing restructuring plan, announced in May 2024, restructuring and impairment charges totaled $71 million, with $39 million in other transformation costs in Q1. In total, the plan is expected to cost between $140 million and $160 million. The outlook for Q2 is where the headwinds stiffen. Management expects revenue to decline by 6% to 7%, with North America down in the low double digits, EMEA up in the high single digits, and Asia-Pacific dropping in the low teens. Tariffs are the main storm, set to cut gross margin by 340 bps to 360 bps through supply-chain disruptions and an unfavorable channel mix. However, some of that pain will be softened by foreign exchange and pricing benefits. Operating income is anticipated to be between a $10 million loss and breakeven, while adjusted operating income could land somewhere between $30 million and $40 million. Adjusted EPS is estimated to be between $0.01 and $0.02. Under Armour's road ahead is lined with headwinds, as both CEO Kevin Plank and CFO David Bergman acknowledged. Plank noted the sting of $100 million in new tariff costs and softer demand for fiscal 2026, warning profitability could drop to about half of last year's figure. Still, he framed it as just another headwind in the company's history of overcoming bigger storms, stressing that the mission — strengthening the brand, elevating prices through innovation, and winning with athletes — remains locked in. The CEO's confidence is matched by a clear playbook — premium products, sharper brand positioning, and a compelling price-to-value proposition. Bergman echoed the realism, projecting adjusted operating income to be roughly half of fiscal 2025 levels, with EPS further pressured by higher interest expenses and a steep jump in tax rate. Yet, the tone from the top stays steady, focused on brand power over short-term turbulence, determined to push the transformation forward. Analysts tracking the company anticipate fiscal 2026 EPS to fall 68% YOY to $0.10, before rising 140% annually to $0.24 in fiscal 2027. What Do Analysts Expect for Under Armour Stock? Analysts had plenty to say after Under Armour's Q1 results, and the mood was far from uniform. Evercore ISI trimmed its price target to $5 from $6, sticking with an 'Underperform' rating, and slashing forecasts. Q2 EPS expectations plunged to $0.02 from $0.24, and full-year 2026 dropped to $0.26 from $0.42. The concern is weak pricing power, not enough innovation to drive growth, tougher competition fighting for shelf space, and the looming hit from tariffs. Stifel analyst Jim Duffy played the optimist, reiterating a 'Buy' rating and $10 target. Q1 numbers came in roughly as expected, with revenue $2 million above their call and EPS just $0.01 light. Still, Q2 guidance was soft, $50 million below Stifel's revenue forecast and EPS off by $0.25 at the midpoint. The brokerage firm views EMEA as a bright spot but acknowledges North America's continued drag. Jefferies took a middle-of-the-road stance, lowering its target to $6 from $7 and maintaining a 'Hold.' Analysts noted that Q1 results were roughly in line, but the market balked at the steep Q2 guidance reset, especially the sharp drop in operating income. Analysts are cautious about UAA stock's potential. Among the 23 analysts covering the stock, the consensus rating is a 'Hold.' That's based on three analysts recommending a 'Strong Buy,' 17 staying on the sidelines with a 'Hold' rating, and the remaining three having a 'Strong Sell.' With shares sliding after earnings, UAA stock's mean price target of $5.80 hints at 19% rebound potential from where shares trade now. The Street-high target of $10 implies the stock could rally as much as 84%. On the date of publication, Sristi Suman Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
USA Today
9 minutes ago
- USA Today
I asked Truth Social AI to fact-check Trump
This newsletter, Translating Politics, was created to help readers sift through Donald Trump's always chaotic and often deceitful rhetoric during his second term as president. Today, we have a little high-tech help for that task, thanks to a new AI chatbot that started operating last week on Trump's social media platform, Truth Social. I used this tool, known as Truth Social AI, to fact-check posts Trump made this week on Truth Social. But first, let's ask our chatbot assistant if Trump has a history of lying. 'Yes,' Truth Social AI responded, 'Multiple major fact-checking organizations and news outlets have documented a sustained pattern of false or misleading public statements by Donald Trump over many years, including during campaigns, his presidency, and post-presidency.' Now let's turn to Trump's claims on Truth Social, where he posted on Aug. 11 that 'Tariffs are making our country strong and rich!!!' Truth Social AI didn't agree, telling me 'Broad tariffs do not make a country 'strong and rich' in the aggregate; they redistribute costs and benefits—raising revenue and protecting some industries while increasing prices, reducing real wages, and risking slower growth over time, according to economic analyses and recent data on the new U.S. tariffs.' Trump on Aug. 11 posted that he was 'nominating highly respected economist, Dr. E.J. Antoni, as the next commissioner of the Bureau of Labor Statistics.' Antoni would replace the last BLS commissioner, who Trump fired on Aug. 1 for issuing an accurate report on job growth. Truth Social AI isn't as impressed with Antoni as Trump, calling him 'a partisan policy economist known for media commentary and work at the Heritage Foundation, but he is not widely recognized in academia as a highly cited or field‑leading economist.' Trump also posted on Aug. 11 that 'the murder rate in Washington today is higher than that of Bogotá, Colombia,' while trying to justify his absurd mobilization of the National Guard to patrol in our nation's capital. Truth Social is working with Perplexity, an AI search engine, which has said Trump's website is a customer and has control over issues like which information sources get cited. Truth Social AI told me, based on available data, that Washington's murder rate would be lower than Bogotá's, not higher. The chatbot also knocked down Trump's false claim that crime is on the rise in Washington, noting that 'the Metropolitan Police Department is reporting a roughly 26% decrease in violent crime so far in 2025.' So for now, you can get accurate information from Truth Social, but not the website's largest stockholder. Read more from me and my colleagues:
Atlantic
11 minutes ago
- Atlantic
Trump Trades National Security for a Deal With China
After making a show of getting tough on China, President Donald Trump desperately needs a trade agreement to prove that his disruptive tactics get results. This week, the United States and China agreed to extend their negotiations, avoiding—for now—another round of tariffs that would have hurt business between the world's two largest economies. But the president's newfound willingness to allow the export of vital AI chips to China indicates that an eventual deal could imperil American interests. Eager for a pact, Trump may give up more than he receives. In 2022, then-President Joe Biden prohibited the export of advanced AI chips to China. Just four months ago, Trump expanded those restrictions. This week, though, Trump confirmed the details of an unusual arrangement effectively reversing that move: The American companies Nvidia and Advanced Micro Devices will be allowed to sell certain chips to Chinese firms if the companies give the U.S. government a 15 percent cut of the revenue from these sales. In essence, Trump sold exemptions to technology-export controls that many experts consider crucial to protecting American security. In a letter last month, Matt Pottinger, who was Trump's deputy national security adviser during the president's first term, and 19 other policy professionals urged the administration not to allow the sale of Nvidia's H20 chip to China, calling the decision a 'strategic misstep that endangers the United States' economic and military edge in artificial intelligence.' Derek Thompson: The disturbing rise of MAGA Maoism Trump may see the arrangement not as a national-security issue but as a business deal: There's a lot of money to be made selling chips to China, and now the U.S. government will materially benefit. But Trump must also realize that he's made a concession to Chinese President Xi Jinping. Beijing has persistently demanded that Washington remove U.S. export controls on advanced chips, and Xi personally pressed Biden for relief without success. Trump justified his flip-flop by arguing that the H20 chip is not among Nvidia's most high-powered products. He's right about that, but it's far from outdated. Chinese companies crave the H20 to help them deploy AI services. Indeed, the demand for the H20 appears to have alarmed Chinese authorities, who would prefer that local companies use homemade alternatives. Even as Beijing fights the U.S. restrictions, officials have tried slowing the rush by signaling in state media that the Nvidia chip is unsafe. Although Chinese designers have developed a similar chip, they are unable to produce enough, also due to U.S. restrictions that prevent them from using the top chip manufacturer, Taiwan Semiconductor Manufacturing Company. Trump has left the door open to further concessions. Because China's tech industry still can't match Nvidia's AI chips, Beijing is likely to prod Trump to ease restrictions on more advanced semiconductors. Rather than firmly committing to export controls, Trump suggested on Monday that he would be open to permitting Nvidia to sell China downgraded versions of its most powerful chips. Xi has every reason to ask for more. Trump's desire for a deal gives Chinese leaders leverage. And given Trump's pattern of sudden policy reversals, he has likely left an impression that anything could be on the table. Beijing is clearly all in on the negotiations. According to U.S. Treasury Secretary Scott Bessent, the Chinese government sent 75 officials to the most recent round of talks, in Stockholm in late July, compared with his own skeleton crew of 15. 'Xi now feels more emboldened to probe for a wider range of potential concessions, not only economic but also security concessions,' Ali Wyne, an expert on U.S.-China relations at the International Crisis Group, told me. Wyne fears this could lead to a 'lopsided bargain' in China's favor. Thomas Wright: Trump wasted no time derailing his own AI plan Xi has already gained on his top-priority issue: Taiwan. He urged Trump to approach Taiwan 'with prudence' during a phone conversation in June, according to the Chinese government's official summary. Washington then reportedly canceled meetings with Taiwan's defense minister, a step that surely pleased Beijing, which strives to isolate the island's government. The Trump administration also appears to have discouraged Taiwanese President Lai Ching-te from making stopovers in U.S. cities while en route to Latin America for diplomatic visits. Xi has done little in exchange. Beijing's most significant goodwill gesture was a June decision to restrict the sale of two chemicals that are used to make the illegal fentanyl circulating on American streets, an issue of utmost importance to the Trump team. But Beijing's action on curtailing the fentanyl trade will likely remain conditional on Trump's good behavior. Trump recently called on Xi in a social-media post to buy more U.S.-grown soybeans—which would be great for some American farmers, but is hardly an even swap for China's access to high-tech chips. Meanwhile, Xi has deftly created and deployed levers of pressure. Amid the escalating trade war in April, Beijing imposed controls on the export to the U.S. of rare-earth metals—an industry that China dominates—and then used their easing as a negotiating tool. In the end, Xi may not get all he wants. But he is winning just by talking. China's leaders have apparently learned that they can distract Trump from more strategic issues by haggling with him over tariff rates and soybean sales. The desire for a deal has so consumed the Trump team that any grander strategy to contend with China's growing power seems to have gotten lost. Last week, Trump imposed high tariffs on India in an attempt to compel New Delhi to curtail purchases of Russian oil—angering a potential partner in the global competition with China. Friendlier relations with China are certainly better than open hostility. The question has always been: At what cost? Trump may eventually seal a trade deal with China that benefits him, but not necessarily the nation.
