MUNICH -- Volkswagen Group’s first-quarter operating profit rose 17 percent, helped by cost cuts at the VW brand, a weaker euro and a profit at Spanish unit Seat. The group's Audi and Porsche brands saw margins shrink on higher investments.
The results provided the automaker with some respite after the unexpected resignation of longtime Chairman Ferdinand Piech on April 25.
Quarterly earnings before interest and taxes increased to 3.3 billion euros ($3.6 billion) from 2.9 billion euros a year earlier, VW said today in a statement.
Operating profit improved to 6.3 percent of revenue from 6 percent. VW stuck to a full-year target range of 5.5 percent to 6.5 percent.
“After a few weeks of boardroom distractions, we think investors will be reminded progress toward VW’s 2018 targets is yet to accelerate,” Michael Tyndall and Kristina Church, analysts at Barclays, said.
The quarterly earnings "will allay some concerns that recent board changes were related to operating conditions," Philip Watkins, a London-based analyst at Citigroup, said in a note.
VW was shaken by Piech's comments earlier this month questioning the authority of CEO Martin Winterkorn and dismissing him as a potential successor as chairman. The attack came without explanation and was followed by behind-the-scenes efforts to oust the CEO.
The automaker didn't address the power struggle in its earnings statement, but Winterkorn, 67, did defend the company's strategy. "We are optimally positioned to master the divergent trends in the global automotive markets," he said in the statement.
Analysts were relieved by signs of progress with the group's modular production strategy which aims to use a core range of components across a wide variety of models. "These are good numbers," Bankhaus Metzler's Juergen Pieper said. "The modular production strategy is progressing and tailwinds may grow over the course of the year," he said, citing positive currency effects and cost savings at the core VW brand.
First-quarter revenue for the 12-brand group rose 10 percent to 52.7 billion euros. VW remained in second place in worldwide deliveries versus Toyota during the quarter, with sales rising 1.8 percent to 2.49 million cars and trucks, compared with a 2.5 percent decline to 2.52 million vehicles at Toyota.