BMW News

BMW didn't follow the recent trend found in the major automakers, where profits were increasing as the automotive industry continues to rebound. BMW's third-quarter profits fell 3.7%, to $2,600,000,000, missing expectations, and sent the stock down more than 3.5% initially.

Its automotive earnings plunged even lower, down 6% to $2,090,000,000, and its profit margins declined 60 basis points, to 9%.

One of the reasons for BMW's declining profits is its heavy investment in its electric-vehicle lineup, with vehicles such as the i3. BMW said that it had budgeted roughly 7% of its revenues for capital expenditure, but now the company estimates it will cost more. That caused BMW to lower its fourth-quarter profit estimate with the expectation of this spending on new vehicles to continue. However, it still expects full year pre-tax profits to be in the same range as last year.

"Due to high levels of expenditure for new technologies and models as well as investment in the production network, profit before tax for 2013 should be on a similar level with the previous year," said CEO Norbert Reithofer, according to IndustryWeek.

Ultimately, this heavy investing in its vehicles should bode well for revenue and sales increases going forward. BMW plans to launch 25 new models through 2014, and the i3 will go on sale this month in Europe before its launch in the U.S. and China next calendar year.—Paul Duchene