As Europe’s largest automaker has been focused on cutting costs to revive earnings, Volkswagen AG posted third-quarter operating profit that beat all analyst estimates.
Earnings before interest and taxes increased 20 % to 2.78 billion euros ($3.82 billion) from 2.32 billion euros a year earlier, announced VW. Earnings were higher than the 2.72 billion-euro average estimate of 10 analysts compiled by Bloomberg. Revenue, on the other hand, went slightly down by 3.8 % to 47 billion euros. The shares climbed the most in more than a year.
“We are focusing on disciplined cost and investment management, as well as on further improving all our processes,” Chief Financial Officer Hans Dieter Poetsch said in a statement. “This is particularly important given the fact that the economic environment is not expected to improve in the short term.”
“Porsche has been showing a great performance since the integration into VW,” said Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach,Germany. “They’re bound to continue on this course as they expand the brand’s product lineup and enter new markets.”
VW, which aims to snatch the global auto-sales lead away from Toyota and GM by 2018, is now working hard to streamline expenses, with more sharing of technology among its eight car brands, three commercial-vehicle divisions and the Ducati motorcycle unit.