Volkswagen raises earnings outlook as it returns to profit

AP News
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Posted: Oct 27, 2016 5:24 AM
Volkswagen raises earnings outlook as it returns to profit

FRANKFURT, Germany (AP) — Volkswagen raised its earnings outlook Thursday after bouncing back to a profit of 2.34 billion euros ($2.55 billion) in the third quarter from a large loss a year earlier, when it took a big charge from its car emissions scandal.

The after-tax profit reported Thursday compared with a loss of 1.67 billion euros in the same period a year ago. At the time, the company took a 6.7 billion euro charge in anticipation of looming costs for recalls, fixes and buybacks of diesel cars that it had fitted with software that enabled them to cheat on emission tests.

A judge in federal court in San Francisco on Tuesday approved a $15 billion settlement under which Volkswagen will buy back or fix almost half a million cars.

Third quarter sales revenue rose 1 percent to 52.0 billion euros. Global vehicle sales for the company's brands, which include Audi, SEAT, Skoda and Lamborghini, rose 4.4 percent.

The company raised its outlook for the year, saying this year's sales revenue would match last year's, instead of the 5 percent drop expected in the earlier forecast.

Its cash cushion — which would help it pay current and further settlements — rose to 31.1 billion euros at the end of September, up from 28.8 billion euros at the end of the previous quarter.