1307 GMT - BMW's profit warning underscores a pattern of supplier problems in the industry and undercuts expectations of a sunnier second half based on new product launches, RBC Capital Markets analyst Tom Narayan says in a note. The German luxury-car maker's newly lowered earnings expectations--6%-7% EBIT for its automotive division--warrant new Wall Street estimates at the bottom end of that range, Narayan says. The cut comes from weakness in China and a costly problem with a braking system that requires fixes under warranty. But the order of magnitude from halted deliveries and market softeness in China are unknown, RBC says. Narayan notes supplier issues with Audi and Mercedes and says the industry narrative of a better 2H is in question, adding that profit warnings from other carmakers would be unsurprising. Shares fall 8.4% at EUR71.10. (david.sachs@wsj.com)
(END) Dow Jones Newswires
September 10, 2024 09:07 ET (13:07 GMT)
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