German carmaker Volkswagen today confirmed its forecasts for 2017 after boosting revenue and profits in the first quarter, even as its emissions cheating scandal continues to make headlines.
The group reported net profit of 3.4 billion euros (USD 3.7 billion) in the period from January to March, up 44 per cent compared with the first three months of last year.
Revenues at the massive group, whose stable of 12 brands ranges from luxury Audi to generalist VW and lower-end Skoda, grew 10 per cent to 56.2 billion euros.
Both results significantly outperformed forecasts from analysts surveyed by data company Factset.
"Our quarterly figures were positively impacted by the strong performance of the group brands, the launch of new, compelling products and solid earnings in Western Europe," chief executive Matthias Mueller said in a statement.
VW confirmed that its operating profit increased by 28 per cent to 4.4 billion euros in the three-month period, raising the return on sales to 7.8 per cent.
Looking ahead to the full year, the group said it aims to keep that figure "between 6.0 per cent and 7.0 per cent," while increasing revenue by up to 4.0 per cent compared with last year.
"Challenges will arise particularly from the economic situation, intense competition in the market, exchange rate volatility and the diesel issue," the carmaker said.
"The VW group's results for the first quarter are convincing," commented analyst Frank Schwope of Nord/LB bank.
Its strong position in China should help Volkswagen keep the top spot as the world's most prolific carmaker by unit sales over the course of the year, holding off rival Toyota, he went on.
But questions remain over who at Europe's largest carmaker knew of a scheme to disguise higher-than-allowed emissions of nitrogen oxides in its diesel vehicles from regulators, which the group admitted to in September 2015.
In recent months, the Porsche-Piech family shareholders have publicly fallen out over the scandal.
And VW has so far set aside more than 22 billion euros in provisions to cover fines and compensation related to the "dieselgate" affair, but experts estimate the final bill could be much higher.
"Most of the costs from the diesel scandal should have been digested by now. However, we can't rule out further provisions in connection with it in the coming quarters," analyst Schwope cautioned.
Shares in VW fell 0.87 per cent to 143.15 euros (USD 156.23) by 1140 GMT in Frankfurt trading today, against a Dax index of leading German shares just 0.13 per cent lower.
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