VW’s shares up as operating profit drops less than expected
VW has struggled to adapt to the worldwide harmonised light-vehicle test procedure, resulting in a 3.6% decline in deliveries
Frankfurt — Volkswagen (VW) has reported a smaller-than-expected 18.6% drop in third-quarter adjusted operating profit, boosting its shares despite weaker vehicle sales tied to the introduction of more stringent anti-pollution rules.
The car maker’s adjusted operating profit came to €3.51bn in the three months until end-September, better than the €3.2bn predicted in a Reuters poll of banks and brokerages.
It affirmed on Tuesday that its target for 2018 operating return on sales before special items at both the group and its passenger cars business area of 6.5% to 7.5%.
Including special items, such as an €800m fine against VW’s premium brand Audi, the adjusted operating margin will fall moderately short of the expected range, it said.
“The fact that VW does not have to change its forecast makes it look more robust than most of its competitors, namely Daimler and BMW; it demonstrates VW’s talents in both the product and the cost side,” Metzler analyst Jürgen Pieper said.
Shares in VW rose 4.9%to €149.42 in early trade, making them the biggest gainers on Germany’s blue-chip DAX 30 index.
VW has struggled to adapt its fleet to the worldwide harmonised light-vehicle test procedure (WLTP), which took effect last month, resulting in a 3.6% decline in deliveries during the quarter as some car models remain unavailable for sale.
VW is also still feeling the impact of its 2015 diesel emissions scandal that has rewritten the rules for the car industry in many major markets. Analysts at NordLB said the car maker could still face penalties and fines of up to €20bn tied to its diesel cheating scandal.
NordLB and Metzler reiterated their “buy” ratings on VW’s stock. Despite the new WLTP rules, VW said it expects new vehicle sales to rise moderately this year, after delivering 10.74-million vehicles to customers in 2017.