Volkswagen's 1st quarter profit slips on its legal risks

May 02, 2019 - 2:54 am

FRANKFURT, Germany (AP) — German automaker Volkswagen saw operating profit slip in the first quarter as the company set aside 1 billion euros for legal issues but reaffirmed its profit goals for the year and saw better profits at its core brand.

The company said Thursday that operating profit fell to 3.9 billion euros ($4.4 billion) from 4.2 billion euros in the same quarter a year ago. Group sales revenue rose 3.1% to 60 billion euros.

The Volkswagen brand, one of the company's 12, saw operating profit rise 5% to 921 million euros as cost control and a more profitable model mix compensated for lower volumes.

Earnings fell however at two of the company's chief money makers, its luxury Audi and Porsche divisions. Audi saw profits fall to 1.1 billion euros from 1.3 billion euros because of model changes and higher spending on new products and technologies. Porsche's operating profit fell 12% to 829 million euros.

Volkswagen still faces legal issues from its 2015 scandal over cars rigged to cheat on diesel emissions test, including pending suits from investors who say the company didn't inform them of the emissions issue in time. The company says it met its disclosure requirements.

The Wolfsburg-based automaker said it was holding to its forecasts for sales and profits this year, predicting that sales revenue could increase by as much as 5% over the prior year and that returns on sales would be between 6.5% and 7.5%.

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