Volkswagen shrugs off scandal as shares up on 28pc rise in profits
Volkswagen has reported a 28pc jump in first-quarter operating profit, helped by a return to earnings growth at its core VW brand which has struggled to recover from the German carmaker's diesel emissions scandal.
Group operating profit came to €4.4bn in the three months to the end of March, compared with €3.4bn in the year-earlier period, Volkswagen said yesterday as it published key financial figures ahead of schedule.
Although the group has bounced back from the scandal and overtook Japan's Toyota last year to become the world's biggest-selling carmaker, analysts view a turnaround at the VW brand as key to its prospects.
Shares in VW jumped on the news, trading 3.7pc higher at €136 by mid-afternoon yesterday, making them the third-biggest gainers on the STOXX Europe 600 index.
Volkswagen said yesterday that first-quarter operating earnings at the VW brand came to around €900m.
"Causal factors for the Volkswagen Brand result include the success of new model introductions, particularly the Tiguan, and a strong financial performance in the West European market," Volkswagen said in a statement. "Optimised fixed costs also positively affected the result," it added.
DZ Bank analyst Michael Punzet, who has a "hold" recommendation on VW's stock, said he had expected the brand's operating profit to come to around €500m. Volkswagen said its other brands, which include Audi and Skoda, also contributed to the good performance but did not provide details.
It said it still expected to report a full-year group return on sales of between 6 and 7pc this year. Volkswagen is due to publish detailed first-quarter results on May 3. (Reuters)