Berlin, Germany— BMW shares experienced a decline on Tuesday following the release of the car maker’s second-quarter financial report. Although the company raised its guidance for the auto segment for the year, its automotive margin fell short of expectations.

At 10:30 GMT, BMW shares were down by 6.1% to EUR104.14.

According to BMW, its automotive segment closed the quarter with an earnings before interest and taxes (EBIT) margin of 9.2%, which is lower than the consensus of 10.1%. Analyst Tom Narayan from RBC Capital Markets noted this discrepancy in a recent statement.

BMW highlighted that the first half of the year was solid and showed great momentum. However, it also mentioned that it expects higher expenses for suppliers to be an ongoing challenge in the second half.

In terms of outlook, BMW now projects an EBIT margin for 2023 between 9% and 10.5% for its automotive segment, compared to the previous target of 8% to 10%. Narayan suggests that this revised guidance is likely already accounted for in current market estimates, as consensus was already at 9.8%.

Overall, BMW’s update aligns with what other car makers are reporting—an anticipated slowdown in the second half of the year.

The full first-half results from BMW will be released on Thursday.

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