On Thursday, BMW (ETR:BMWG) shares fell by 2.7% to €83.515 following the release of its mixed Q2 financial results. The primary cause for the decline was investor disappointment over the free cash flow, which totaled €1 billion, significantly below the consensus forecast of €1.79 billion. While the EBIT (earnings before interest and taxes) for the automotive segment exceeded expectations due to high production, other key financial metrics fell short of forecasts.

According to UBS Global Research, the EBIT result for automobiles was €3.877 billion, slightly below the consensus forecast of €3.912 billion. Total sales reached €36.944 billion, which also missed the projected €37.666 billion. The EBIT margin was 8.4%, lower than the expected 8.6%. Car sales amounted to 619,000 units, slightly below the forecast of 621,000 units, though revenue per unit was €51,809, exceeding the consensus estimate of €51,098.

In the motorcycle segment, BMW reported EBIT of €110 million, less than the consensus forecast of €129 million. The EBIT margin for motorcycles was 11.1%, lower than the expected 12.6%, and revenue totaled €989 million compared to the forecast of €1.023 billion.

However, BMW's financial services segment showed stable results with EBIT of €725 million, exceeding the consensus forecast of €697 million. Sales in this segment reached €9.742 billion, surpassing the forecast of €9.345 billion.

The company confirmed its EBIT margin forecast for the automotive segment for 2024 to be between 8-10%, in line with the consensus forecast of 8.5%. The EBIT margin forecast for motorcycles remained at 8-10%, exceeding the forecast of 7.7%. BMW also reaffirmed its free cash flow expectations for the automotive segment at over €6 billion, slightly below the consensus estimate of €6.3 billion.

A key challenge for BMW remains concerns about weak demand for vehicles and the need for effective working capital management amidst changing market conditions. Investors will closely monitor how the company addresses these challenges in the second half of the year.