FRANKFURT -- Volkswagen Group posted an unexpected decline in fourth-quarter operating profit, even as it said full-year results for 2011 were a record.
Quarterly operating profit slid 0.9 percent to 2.29 billion euros ($3.05 billion), based on preliminary full-year results published on Friday.
Analysts had forecast a slight increase to 2.38 billion on the back of improvements at the company's core VW and Audi car brands.
VW said full-year profit for 2011 was an all-time high for the group, rising 58 percent to 11.3 billion euros from 7.14 billion euros a year earlier.
Europe's biggest automaker is not immune to the economic downturn in its home region, despite its strong market position in the relatively dynamic economies of Asia and Latin America.
Car production at VW outstripped deliveries by nearly 100,000 in the final quarter, creating a stock of unsold vehicles that was nearly twice as big as the number of cars built in the first nine months.
"VW generated a negative cash flow in the fourth quarter," Michael Punzet, a DZ Bank analyst, said in a note to investors. "In our view, this is mainly related to production cuts at year end and some investments at plants for a new underbody that will be used as the basis for several vehicles."
Albrecht Denninghoff, an analyst at Silvia Quandt, said the fourth-quarter result was not bad, considering VW "splashed out some 7 billion to buy shares in MAN and increased their investments due to the all new Up minicar and upcoming Audi A3." After an amazing rally at the start of the year, upside potential is dwindling, he added.