Volkswagen Assemblage reported stronger-than-anticipated third-quarter earnings on Wednesday, but lowered its outlook for 2019 vehicle deliveries citing a “challenging customer base environment.”
The world’s biggest automaker posted operating profit of 4.5 billion euros ($5 billion) for the third rooms of 2019. That compared with operating profit of 2.7 billion euros a year earlier. Analysts canvassed by Reuters had expected third-quarter operating profit to come in at 4.4 billion euros.
Shares were up around 0.5% during beginning morning deals.
“We are very pleased with the result, it is certainly not that easy these days,” Frank Witter, chief economic officer of Volkswagen, told CNBC’s Carolin Roth on Wednesday.
14 May 2019, Berlin: At Volkswagen’s Annual General Intersection, a VW employee is plugging a charging cable into a VW Passat with plug-in hybrid technology.
Michael Kappeler | image alliance | Getty Images
‘Tough environment’
Nine-month adjusted operating profit before special items came in at $14.8 billion euros, up from 13.3 billion euros in the nonetheless period last year, the company said Wednesday.
Group sales revenue also jumped nearly 7% to 186.6 billion euros.
Though, Volkswagen warned a slowdown in global demand would result in annual vehicle deliveries being in line with year-earlier patterns, tweaking its earlier forecast.
“Despite the gain in market share, the Volkswagen Group anticipates that vehicle demands will contract faster than previously anticipated in many regions of the world.”
“In view of this situation, Volkswagen now watches deliveries to customers in 2019 to be on a level with the previous year. Up to now, a slight increase had been expected,” the company translated in a statement.
When asked whether he was concerned about the company having to downgrade its annual vehicle sales standpoint, Witter told CNBC: “When you are forecasting into a difficult market environment, you need to manage your inventories surely carefully. That is always important but even more important in such an environment.”
“So, it is a tough environment but with our outcome and strong brand we feel quite well prepared. But we know the reality,” Witter said.
Earlier this month, rival carmaker Ford cut its prognosticate for operating profit for the year, blaming a weaker-than-expected performance in China and other headwinds.