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BMW third quarter affected by intermediate consumption for the development of electric cars



The BMW logo can be seen on the second day of the Paris Motor Show on October 3, 2018 in Paris (France). REUTERS / Regis Duvignau

FRANKFURT (Reuters) – German car manufacturer BMW ( BMWG DE ) reported Wednesday a decline in operating profit in the third quarter by 27 percent to 1

.75 billion euros (2.00 billion US dollars), which missed analysts' expectations due to currency headwinds and higher research and development costs.

Analysts in a Reuters survey had expected earnings before interest and taxes (EBIT) of € 1.795 billion on average.

BMW said that despite a slight increase in luxury car deliveries, the operating margin for the automotive division fell from 8.6 percent in the previous year to 4.4 percent, well below the target of 8 to 10 percent.

Earnings were impacted by higher commodity prices, currency effects, higher goodwill and warranty provisions, tariffs between China and the US, and a price war in Europe, according to the carmaker.

Last month, BMW warned that its pre-tax profit would fall this year, bucking earlier expectations of a flat result and a reduction in car profit margin forecasts, blaming intense price competition.

($ 1 = $ 0.8747)

Reporting by Edward Taylor, Editor of Riham Alkousaa

Our Standards: The Thomson Reuters Trust Principles.

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