Automaker Volkswagen AG said Wednesday its net profit jumped to euro1.71 billion ($2.5 billion) in the first quarter as sales rose strongly in North America, Asia and other emerging markets.
Quarterly Group sales revenue grew 30.8 percent to 37.47 billion euros from 28.65 billion euros in the previous year. Earnings per share of euro3.47 topped analyst expectations of euro3.23 per share, and Volkswagen shares traded up 2.89 percent at euro114.00.
The company expect the Group’s sales revenue and operating profit in 2011 to be higher than the previous year.
Sales in Western Europe grew more slowly, and were hard hit in countries saddled with heavy debt and slow growth. Sales in Britain rose only 2.4 percent, while they were flat in Italy and sank in Spain, where the unemployment rate is around 20 percent.
Volkswagen sold 4.2 percent fewer cars in Japan in the first quarter than in the year-earlier period, but the Asian country accounts for less than 1 percent of cars the company sells.
“We continue to see the most dynamic growth prospects in the emerging markets of Asia and Latin America, whereas the industrialized nations will continue to experience only moderate growth,” Volkswagen said on Wednesday.
Analyst Max Warburton at Sanford C. Bernstein called the result “a stunning beat,” especially when measured by EBIT, or earnings before interest and taxes, of‚~2.9 billion, which represents a “fantastic” operating profit margin of 7.8 percent 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.
“VW’s operating result is far beyond what we could have imagined possible for this company and if sustained — and of course there are many if’s — would suggest that VW (and its German peers, which are probably sharing the spoils of the boom in demand for German cars) is a fundamentally undervalued stock.”