BASF, Germany's chemical giant has beaten estimates in the first quarter this year, after its oil and gas unit buoyed up profits while the chemicals business posted disappointing numbers.

Higher demand from car-part makers and more gas trading helped boost earnings before interest, tax (EBIT) to €2.53bn, above analyst estimates of €2.41bn but still down 7.3 percent from last year.

"Increased raw material costs could not be fully passed on in all business areas, which put pressure on our margins," said Kurt Bock, Chief Executive Officer at BASF in a company statement. "Our oil and gas and agricultural solution segments increased their earnings significantly."

BASF's first quarter sales gained 6.3 percent to €20.6bn, beating a €19bn analyst estimate but net income fell 29 percent to €1.72bn. Operating earnings from oil and gas trading of €1.16bn exceeded estimates by almost half, but the group revealed that higher raw material prices and lower sales volumes weighed on its chemicals and plastics units.

The company said it may make acquisitions to help sharpen a focus on innovation and get closer to the end consumer.

At 0740 GMT, BASF shares were trading around 2.5 percent lower at €63.36 in Frankfurt, outpacing a 1.1 percent decline for the broader Xetra DAX index.