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