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BMW Group reported record sales volume, revenues and earnings for 2016 but analysts noted a drop in automotive operating profit and some unexpected write-downs.

The company said automotive segment profitability was “within target range” as sales rose 1% to EUR86,424m. EBIT fell 1.8% to EUR7,695m and EBIT margin to 8.9% from 9.2% in 2015.

A BMW spokesman reminded Reuters of the automaker’s earlier warning the redesigned 5 Series production ramp-up would lead to higher fourth-quarter costs. “We expect this to have a dampening effect on earnings,” then chief financial officer Friedrich Eichiner had said on 4 November.

BMW said the profit was “within the target range of between 8 and 10% or higher” for the seventh financial year in succession. Segment profit before tax improved 5.2% to a record EUR7,916m.

Group sales rose 2.2% to a record EUR94,163m but EBIT slipped 2.2% to EUR9,386m though group profit before tax (EBT) increased by 4.8% to a EUR9,665m record. All three operating segments – Automotive, Motorcycles and Financial Services – achieved record pre-tax earnings in 2016, making an all-round contribution to earnings growth. Group pre-tax return on sales (EBT margin) improved to 10.3% from 10%). Group net profit rose 8% to EUR6,910m, also a record.

The results did not impress analysts Reuters polled who had expected EBIT of EUR9.89bn on EUR95.15bn in revenue, based on the median of 17 estimates.

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“It’s a miss on group numbers,” Evercore ISI analyst Arndt Ellinghorst told the news agency.

Ellinghorst was surprised at negative adjustments that included estimated resale values for leased vehicles. Those were in addition to EUR498m of “eliminations” from fourth-quarter profit.

The numbers show “a lot of residual value pressure or conservatism”, he told Reuters, adding that automakers typically anticipate lower resale values as markets peak.

In 2016, over 2m BMW brand vehicles (+5.2% to 2,003,359) were sold for the first time within a single year.

Mini volume was up 6.4% to 360,233 and Rolls-Royce sold 4,011, 6% up year on year.

BMW is expected to reveal more at its annual accounts press conference in Munich on 21 March.