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Volkswagen First-quarter Profit Triples, But Misses Expectations

Source: AFP

Volkswagen’s (VW) first-quarter net profit leapt threefold to EUR1.71 billion (US$2.5 billion), the biggest European carmaker said on Wednesday, although the figure slightly missed market expectations.

Analysts polled by Dow Jones Newswires had forecast a net profit of EUR1.84 billion for VW, which also said that for the first time, it had sold two million vehicles in a single quarter.

Shares in the group soared in midday trading on the Frankfurt stock exchange, as did those of two other German car makers, Daimler and BMW.

In the first quarter of 2010, VW reported a net profit of EUR473 million.

This time, its operating profit came in at EUR2.9 billion, a much more modest gain from the 2.1-billion figure a year earlier.

As for sales, the VW group, which owns nine brands including Audi, Seat and Skoda, reported a 14-per cent increase in terms of the number of vehicles and a jump of 30.8 per cent in value terms to EUR37.5 billion.

A VW statement pointed to “sustained high demand in China, India, central and eastern Europe, and North and South America” as the main drivers behind its strong results.

It quoted finance director Dieter Poetsch as saying: “Our sound finances and continuous improvements in profitability are the basis for the Volkswagen group’s successful future.”

Looking at 2011 overall, VW chairman Martin Winterkorn added: “Volkswagen shifted into the fast lane in 2010 and that’s exactly where we intend to stay this year.”

The group confirmed that it still expects sales and operating profit to surpass the 2010 figures of EUR126.9 billion and EUR7.1 billion, respectively.

VW shares showed a gain of 3.77 per cent to EUR125.25 in midday trading, while the DAX index of German blue chips was just 0.67 per cent higher overall.

Daimler was up by 2.50 per cent at EUR53.26, while BMW had gained 1.91 per cent to EUR62.89.