VANCOUVER, BRITISH COLUMBIA – (April 27, 2011) Clearlease Reports Automaker Volkswagen AG sharply increased net profit to €1.71 billion ($2.5 billion) in the first quarter as stronger sales in emerging markets such as China, Argentina, and Russia more than made up for slumps in debt-stricken European countries.
Earnings per share of €3.47 topped analyst expectations of €3.23. Company shares rose steadily after Wednesday’s announcement and traded up 6 per cent at €117.45 by midafternoon German time.
The company reiterated that this year’s earnings would exceed last year’s, despite a drag on profits from see-sawing exchange rates and higher raw materials prices.
Volkswagen delivered 1.99 million cars worldwide, up 14 per cent, outperforming the world auto market, which grew 8.1 per cent, the company said. Revenue jumped 31 per cent to €37.47 billion.
Big jumps in vehicle deliveries in China, Mexico and Argentina — up 20 per cent or more — and in India, where they more than tripled, showed how rapidly growing emerging markets are eclipsing richer countries in Europe as markets for European manufacturers.
Company officials said they had boosted their cash holdings, giving them flexibility to continue expanding and meet their goal of being the world’s largest carmaker by 2018.
“Our brand continued to perform succesfully in the first three months of 2011,” the company’s chief financial officer, Hans Dieter Poetsch, said on a conference call. “Thanks in particular to higher revenue and a firm hand on operating costs, operating earnings more than tripled to €2.9 billion.”
While the company stuck with its forecast, shifting currencies, in particular the weakening U.S. dollar and British pound, were expected to have an effect on the companies finances, as would the rising cost of raw materials such as steel.
The company said it had seen only very limited effects on parts supplies due to the earthquake and nuclear disaster in Japan and that earnings had not been affected.
Analyst Max Warburton at Sanford C. Bernstein called the result “a stunning beat,” especially when measured by the EBIT figure, or earnings before interest and taxes, of €2.9 billion, which represents a “fantastic” operating profit margin of 7.8 per cent across the group.
That includes not just higher-margin Audi but the mass market Volkswagen brand as well, a segment where margins are usually lower.
Warburton said the earnings appear to be a part of a wider trend in favour of German cars that also helps competitors BMW AG and Daimler AG , which traded up 2.1 and 2.7 per cent.
Sales in Western Europe grew more slowly, and were hard hit in countries saddled with heavy government debt and slow growth. Sales in Britain rose only 2.4 per cent, while they were flat in Italy and sank in Spain, where the unemployment rate is around 20 per cent.
Volkswagen ‘s home market, Germany, showed some recovery, with sales bouncing back to its 10-year average for the first quarter as a stronger job market gave consumers more confidence.
VW unit sales in the United States rose 16 per cent amid stronger consumer confidence, although the market remains far below the credit-boom period 1999-2007.
Wolfsburg-based Volkswagen AG includes the Volkswagen , SEAT, and Skoda mass-market brands, and luxury makes Audi , Lamborghini , Bentley, and Bugatti.
The company said it was making progress toward completing its complex merger with Porsche. Volkswagen has a 49.9 per cent share in Porsche’s automaking operations and has the right to buy the rest later, but a merger with Porsche’s parent company has been held up by legal questions.
Stuttgart-based Porsche separately announced it had more than doubled operating earnings to €496 million in the first quarter, and raised sales revenue 10 per cent to €2.28 billion. Unit sales rose 13 per cent to 23,442 vehicles in the quarter, an increase of 13 per cent from a year earlier.
Video Link: http://www.youtube.com/watch?v=tfX_T9BpIug
For more information please visit us at: http://www.clearlease.com/Career-Opportunities.html
About Dominion Lending Centres Clearlease
Dominion Lending Centres Clearlease Commercial (DLC Clearlease/Clearlease.com) is a fully diversified Lease Finance Mortgage Banking Brokerage Company specializing in Equipment Leasing, Automobile Leasing, Residential, Commercial Lending/Mortgage Financing. DLC Clearlease possesses the capability to accommodate financing needs ranging from a small second Home Mortgage to a Multi-Million Dollar Commercial Projects. No mortgage is too small or too large for this integrated Company.
Equipment Lease Financing in Vancouver, Surrey, Delta, Richmond, Langley, New Westminster, North Vancouer, West Vancouver, B.C. Also offering Automobile Lease Financing and Mortgage information. Founded by the Pidgeon brothers.
You may have recently seen a Dominion Lending advertisement on such media outlets as: Global News, CTV News, CBC Television, Rogers Sportsnet or possibly heard the great Don Cherry, a Canadian Sports legend, discuss Dominion Lending Centres.
Contact DLC Clearlease.com:
Dominion Lending Centres Clearlease
HEAD OFFICE, Bentall Two, Suite 900, 555 Burrard Street, Vancouver, BC, V7X 1M8, CANADA.
Mr. A. Pidgeon, Editor in Chief
Tel: (604) 696-1221 ext. 177
eMail: [email protected]
Website: http://www.clearlease.com
News: http://clearlease.com/category/equipment-lease-blog/feed/rss
Twitter: @clearlease
###
Video Link: http://www.youtube.com/watch?v=tfX_T9BpIug