(Adds detail from shareholder letter, analyst comment)
By Nick Tattersall
FRANKFURT, Jan 30 (Reuters) - German carmaker BMW said on Thursday its revenues rose 10 percent in 2002 and sounded a note of cautious optimism for the current year amid uncertainty about the possible impact of a war in Iraq.
Chief Executive Helmut Panke said in a letter to shareholders he expected the group would continue to perform successfully in 2003, although BMW did not see a dynamic upturn in the global economy until the second half.
"The effects on business of the current tense global political situation remain incalculable," BMW said.
Luxury carmakers like BMW and key rival Mercedes, a unit of DaimlerChrysler , tend to weather economic slumps better than mass market peers, although both saw a downturn in business in their home market in the last two months of 2002.
BMW said group sales rose 9.9 percent to 42.28 billion euros ($45.97 billion) in 2002, while the core automobile segment saw a near 14 percent rise in revenues to 38.18 billion.
A BMW spokesman said fourth quarter sales had slipped 0.4 percent to 9.94 billion euros, partly due to the launch of the new 7-series executive saloon at the end of 2001 which led to a high basis for comparison.
"Sales in the fourth quarter slipped slightly, against market expectations," said West LB Panmure analyst Henrik Lier, who rates the stock outperform. "BMW is preparing the market for the fact that the first half of the year could be difficult."
BMW stock stood 0.6 percent firmer at 0955 GMT at 27.46 euros compared to a three percent rise for the DJ European auto sector index .
THIS YEAR VITAL
BMW unit sales growth outpaced Mercedes overall last year, thanks largely to booming sales of its Mini, but its profit margins have come under increasing pressure as it pushes through the biggest product offensive in its history.
"The product year 2003 will be one of the most important in the history of the BMW Group," Chief Executive Helmut Panke said in the letter. "We will launch more new products in 2003 than in any previous year."
BMW is launching a new version of its key 5-series saloon this year, as well as a diesel version of the Mini, three updated versions of its 3-series, a new small X-3 sports utility vehicle (SUV) and a 6-series coupe.
Capital expenditure rose 15 percent in 2002 to 4.04 billion euros.
BMW stock has lost over a quarter of its value since the group unveiled third-quarter earnings in early November which raised concerns among investors about margin slippage as pre-launch costs took their toll. The European sector fell 17.5 percent over the same period.
"A turning point should be reached around mid-2003," BNP Paribas analysts said in a recent note. "The press launch of the 5-series around April or May could be a good time to return to the stock."
The company, which sold 1.057 million vehicles last year, has said it expects to post higher profits for 2002 than the previous year, when pre-tax profit came in at 3.2 billion euros. BMW is due to publish full results for 2002 in March.
MODEL MIX IMPROVES
Analysts said the sales result at the core automobile segment suggested buyers were opting for more profitable high-specification models.
"The revenue figure in the auto segment was above my estimate, which is very important as it is an indication of a strong model mix development," HVB analyst Georg Stuerzer said.
BMW, which declines to say how profitable individual models are, said sales of the outgoing 5-series fell over 11 percent to 172,323 in 2002 as potential customers waited for the new model.
Sales of the 7-series, a departure from the firm's usually conservative styling and a likely foretaste of the look of the upcoming 5-series, were four percent above the level achieved by its predecessor in its first full year of production.
The trend towards higher-value models also extended to BMW's smallest car, the Mini, with the higher-powered Cooper version accounting for around 56 percent of Mini sales in 2002. (Additional reporting by Hans Nagl in Munich)