International business

BMW raises 2010 outlook

Luxury car maker BMW AG raised its sales and earnings forecasts for 2010 on Tuesday, citing a recovery in global markets and strong demand for new models.

Car sales were up 13.1 per cent in the first half of 2010 compared with a year earlier, BMW said. It pointed to "improved business conditions on the international automobile markets" and demand for models such as the 5 Series and the X1 SUV.

The company said it now expects full-year sales to rise about 10 per cent to more than 1.4 million vehicles. It had previously forecast solid growth in the single-digit percentage range.

It said it now expects full-year pre-tax profit "to rise more sharply than previously forecast," though it didn't give a specific figure. It already had predicted a significant improvement in earnings this year.

BMW's financial services segment now aims for a "significant increase in pre-tax earnings," the company said. It previously had predicted an improvement.

"Given that numerous economic risks remain in the second half of the year, the new outlook is based on the condition that the economic recovery continues and that general business conditions are not significantly dampened," BMW cautioned.

BMW, based in Munich, is to release its second-quarter earnings figures on August 3.

Tuesday's announcement powered BMW shares nearly 6.2 per cent higher to €41.31 (US$51.97) in Frankfurt trading. That was well above the overall 1.4 per cent rise in the DAX index of blue-chip stocks.

- AP

US trade deficit widens in May

The United States trade deficit widened in May to the highest level in 18 months as a rebounding economy pushed up demand for imports of foreign-made cars, computers and clothing.

The trade deficit increased 4.8 per cent to US$42.3 billion, the largest imbalance since November 2008, the Commerce Department reported Tuesday.

American exports of goods and services rose 2.4 per cent but this increase was outpaced by a 2.9 per cent rise in imports.

American manufacturing has been a standout performer so far in this recovery, benefiting from a global economic recovery. But the concern is that export sales will be hurt by the European debt crisis, which has dampened growth prospects in Europe.

Through May, the US trade deficit is running at an annual rate of US$474.8 billion, up by 26.6 per cent from US$374.9 billion deficit for all of 2009.

That had been the lowest annual trade gap since 2001, another year when the country was in recession.

The rise in the May deficit came despite the fact that oil imports dropped by 9.1 per cent to US$27.6 billion, as both the price of oil and the volume of shipments declined slightly.

The 2.4 per cent rise in exports in May, compared to April, pushed sales of American goods and services to US$152.3 billion, the highest level since September 2008.

While sales of soybeans, wheat and other farm products were down in May, demand for American-made autos, industrial machinery, medical equipment and commercial aircraft all increased.

Imports rose 2.9 per cent to US$194.5 billion, the highest level since October 2008, reflecting big gains in imports of cars, computers, oil-drilling equipment and industrial machinery.

The deficit with the European Union rose 7.5 per cent to US$6.2 billion as imports from Europe rose by 3.2 per cent, ouptacing a 1.9 per cent rise in US exports to that region.

- AP