VW profit soars, warns slowdown in sight
Volkswagen, Europe's biggest automaker, said Wednesday its third-quarter net profit soared more than 10-fold but warned of a slowdown in the final three months of the year.
The group reported a profit of 2.2 billion euros (3.0 billion dollars), reflecting strong demand and strict cost controls but did not raise its full-year outlook even though the targets are considered prudent by analysts.
"Increased demand for our models and our disciplined cost management led to these strong results, which have strengthened our sound financial base," VW finance director Hans Dieter Poetsch said in a statement.
The results put VW among the top global automakers that have so far published quarterly results.
"Volkswagen is well ahead of its competitors" thanks in large part to an "excellent implantation in China," LBBW auto analyst Frank Schwope said.
That was reflected in its share price, which has gained around 59 percent this year, the best performance by a German blue-chip stock.
After reporting nine-month results on Friday, VW said third-quarter sales jumped 18.4 percent to 30.7 billion euros, with operating profit soaring to 1.99 billion euros from 278 million euros a year earlier in the depths of the global slump.
Looking ahead, VW warned the sharp rebound would ease however, saying growth "in the first nine months of 2010 will not continue as strongly in the fourth quarter."
VW therefore maintained its full-year targets rather than raising them as many analysts had expected.
VW and its nine brands that include Audi, Bentley, Seat and Skoda, still expects to top last year's unit sales of 6.3 million vehicles and an operating profit of 1.9 billion euros.
Sales by value should exceed 105.2 billion euros, more than the total annual output of countries such as Morocco or Bangladesh.
The group sold 5.4 million vehicles in the first nine months of this year, and its operating profit already stands at 4.8 billion euros for the period.
VW chairman Martin Winterkorn was quoted as saying that "the Volkswagen Group continues to have its sights firmly set on capturing pole position in the automotive industry."
VW wants to overtake Toyota as the world's biggest automaker by 2018.
"We are a little ahead to reach our target of 10 million autos sold" per year by that date, Poetsch said.
Financially it is in a good position to do so, with net cash of 19.6 billion euros as of September 30.
VW has bought 20 percent of the Japanese maker Suzuki, is in the process of taking over Porsche, wants to create a heavy truck division with its Scania brand and rival MAN, and is looking at the Italian marque Alfa Romeo.
In the first nine months of the year, VW earned 1.3 billion euros in China, now its main market, compared with 500 million euros in the same period a year earlier.
A breakdown of sales by brands showed Audi still leading the pack, with an operating profit of 2.27 billion euros from January to September.
Bentley and Seat, on the other hand, continued to post losses, but Poetsch said Seat's fortunes should improve next year.
Shares in VW were 0.34 percent lower at 104.30 euros in afternoon trading on the Frankfurt stock exchange while the DAX index of leading stocks was 0.23 percent lower overall.
© 2010 AFP