Volkswagen Profit Falls on Hit From Ukraine, Software Woes
BERLIN—
Volkswagen AG
reported a 29% drop in net profit in the third quarter as the war in Ukraine, supply-chain woes and the company’s struggle to turn around its software business hit earnings and sales.
With the global economy weakening, forcing auto makers and analysts to curb forecasts on new-car demand, VW told reporters on Friday that it would nevertheless maintain an ambitious profit outlook because it has largely been able to offset rising costs from inflation.
Arno Antlitz,
the company’s finance chief and chief operation officer, said price increases, the stockpiling of critical parts and other measures had helped the company offset the rising cost of raw materials and energy.
Mr. Antlitz said the company has a six-month backlog on orders for new-battery electric vehicles in Europe, or about 1.9 million new cars, which he said would help drive revenue in the months ahead.
“These are effects that are supporting margins,” he said, explaining why the company is maintaining its outlook on revenue and profitability.
Volkswagen continues to expect revenue this year to be 8-13% higher than in the previous year. It also aims to reach the upper end of the 7-8.5% guidance range for operating margin.
Volkswagen reported a drop in net profit to 1.96 billion euros, equivalent to $1.95 billion, in the three months to the end of September, from €2.76 billion a year earlier. It said sales rose 24% to €70.7 billion in the same period.
The company attributed the decline in profit to a €1.9 billion charge from its withdrawal from the Argo AI autonomous-driving software venture it maintained with
Ford
Motor Co. VW and Ford this week said they would stop investing in Argo.
VW said it would instead focus on an existing software partnership with Robert Bosch GmbH, a global auto supplier, for the development of autonomous-driving software outside of China. In China, VW recently invested €2.4 billion in Horizon Robotics, a Chinese software company, to develop autonomous driving software for the Chinese market.
Write to William Boston at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
BERLIN—
Volkswagen AG
reported a 29% drop in net profit in the third quarter as the war in Ukraine, supply-chain woes and the company’s struggle to turn around its software business hit earnings and sales.
With the global economy weakening, forcing auto makers and analysts to curb forecasts on new-car demand, VW told reporters on Friday that it would nevertheless maintain an ambitious profit outlook because it has largely been able to offset rising costs from inflation.
Arno Antlitz,
the company’s finance chief and chief operation officer, said price increases, the stockpiling of critical parts and other measures had helped the company offset the rising cost of raw materials and energy.
Mr. Antlitz said the company has a six-month backlog on orders for new-battery electric vehicles in Europe, or about 1.9 million new cars, which he said would help drive revenue in the months ahead.
“These are effects that are supporting margins,” he said, explaining why the company is maintaining its outlook on revenue and profitability.
Volkswagen continues to expect revenue this year to be 8-13% higher than in the previous year. It also aims to reach the upper end of the 7-8.5% guidance range for operating margin.
Volkswagen reported a drop in net profit to 1.96 billion euros, equivalent to $1.95 billion, in the three months to the end of September, from €2.76 billion a year earlier. It said sales rose 24% to €70.7 billion in the same period.
The company attributed the decline in profit to a €1.9 billion charge from its withdrawal from the Argo AI autonomous-driving software venture it maintained with
Ford
Motor Co. VW and Ford this week said they would stop investing in Argo.
VW said it would instead focus on an existing software partnership with Robert Bosch GmbH, a global auto supplier, for the development of autonomous-driving software outside of China. In China, VW recently invested €2.4 billion in Horizon Robotics, a Chinese software company, to develop autonomous driving software for the Chinese market.
Write to William Boston at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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