German luxury auto maker BMW reported on Thursday that net profit last year slumped 89.5 percent, after a loss in the fourth quarter, and slashed its dividend by about two thirds.
Net profit for the year dropped to 330 million euros (422 million dollars), compared with analyst forecasts for one billion euros.
According to my friend, the best online stock broker UK has to offer, the figures caused a shock on the stock market where shares in BMW, which also makes the Rolls Royce and Mini brand cars, fell by about nine percent.
The stock then recovered some of the lost ground to show a loss at mid-day of 3.51 percent to 22.14 euros. The overall DAX index was down 1.89 percent.
The results were hit by charges totaling 2.42 billion euros owing to weakness in the market for second-hand cars, losses on loans made and extra staff costs.
In common with many other leading auto makers, BMW has been hit hard by a slump in consumer spending as a result of the global economic crisis. Sales fell about 18 percent to 12.7 billion euros.
In the fourth quarter, the extra charges caused a loss in terms of earnings before interest and tax of 718 million euros, compared with a profit of 1.3 billion euros in the same period of 2007.
Excluding the effects of exceptional charges, the group would have made an underlying profit in the quarter of 410 million euros, representing a fall of 69 percent.
The group said that it would slash the dividend to 0.30 euros per ordinary share from 1.06 euros in 2007.
The group did not provide any forecasts for this year.