Volkswagen Partly Lifts Guidance on Strong 1Q -- Earnings Review
May 06 2021 - 7:04AM
Dow Jones News
By Kim Richters
Volkswagen AG reported results for the first quarter on
Thursday. Here's what we watched:
REVENUE REVIEW: Quarterly revenue rose to 62.38 billion euros
($74.89 billion) from EUR55.05 billion the year prior thanks to
increased sales volumes and stronger demand for higher-margin
models, beating analysts' expectations of EUR62.28 billion,
according to estimates compiled by FactSet.
OPERATING PROFIT REVIEW: Operating profit rose to EUR4.81
billion from EUR904 million during the same period a year earlier,
when it was hit by the coronavirus pandemic. Analysts polled by
FactSet had expected EUR4.98 billion, while analysts at Jefferies
said consensus estimates for the quarterly result were EUR4.3
billion.
Operating return on sales was 7.7%, compared with 1.6% in the
same quarter a year earlier.
NET PROFIT REVIEW: Net profit was EUR3.24 billion, up from
EUR405 million. Volkswagen said the positive business development
of the second half of last year continued in the first quarter of
2021. Cost-saving programs had a positive effect on earnings, while
one-off restructuring expenses had a negative impact of EUR400
million.
WHAT WE WATCHED:
-CHIP SUPPLY: Volkswagen expects the effect of the semiconductor
shortage that is weighing on the auto industry to be more
significant in the second quarter than it has been so far. So far,
the company has produced 100,000 fewer vehicles than planned due to
the shortage.
-GUIDANCE: On the back of the quarterly results, Volkswagen
partly lifted its full-year outlook. It now expects an operating
return on sales of 5.5%-7.0% compared with a previous guidance
range of 5.0%-6.5%. RBC Capital Markets said consensus expectations
were already at the level of the new guidance with estimates of
6%-8%. "So some were expecting a bigger guidance raise," it said.
Bernstein said its own forecast for Volkswagen's operating return
on sales was already at 7.7% for the year.
Write to Kim Richters at kim.richters@wsj.com
(END) Dow Jones Newswires
May 06, 2021 06:49 ET (10:49 GMT)
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