Volkswagen Stock Up On Volume Growth, Despite Weak Q2 Profit, Outlook Cut

(RTTNews) - Shares of Volkswagen Group were gaining around 4 percent in the German trading after the automajor reported Friday slightly higher sales volume in the second quarter, even though profit and revenues were lower and the firm trimmed fiscal 2025 outlook. The latest results were hit by higher sales of lower-margin all-electric models, as well as increased US import tariffs and restructuring measures.

Oliver Blume, CEO Volkswagen Group, said, "Our sales figures remain stable in a competitive global market. In Europe we expanded our leading position in electric mobility, with a market share of 28 percent and order books remain well filled. Supported by our ongoing product offensive and consistently good demand, we expect the positive trend to continue in second half of the year."

Looking ahead for fiscal 2025, Volkswagen now expects sales revenue to be in line with the previous year, compared to previous outlook of an increase of up to 5 percent.

The Group's operating return on sales is expected to range between 4.0 and 5.0 percent, lower than previously expected 5.5 percent to 6.5 percent.

At the lower end of the forecast ranges for operating result, it is assumed that in particular the current US import tariffs of 27.5% will continue to apply in the second half of 2025. And at the upper end, it is assumed that these tariffs will be reduced to 10%.

According to the firm, challenges will also arise from an environment of political uncertainty, expanding trade restrictions and geopolitical tensions, and the increasing intensity of competition, among others.

In the second quarter, earnings after tax fell 36.3 percent to 2.29 billion euros from last year's 3.60 billion euros. Earnings before tax dropped 32.9 percent year-over-year to 3.31 billion euros.

Operating result dropped 29.4 percent to 3.83 billion euros from 5.43 billion euros a year ago, and operating return on sales was 4.7 percent, lower than 6.5 percent a year ago, partly due to higher sales of lower-margin all-electric models.

Excluding the impact of higher sales of lower-margin all-electric models and tariff costs, operating margin is at nearly 7 percent, representing the upper end of the firm's expectations.

Sales revenue declined 3 percent to 80.81 billion euros from 83.34 billion euros in the prior year.

Deliveries to customers, however, grew 1.2 percent from last year to 2.27 million units. Vehicle sales edged up 0.2 percent to 2.26 million units, while Production dropped 0.6 percent from last year to 2.33 million units.

In the first half, Volkswagen Group sold 4.36 million units, up 0.5 percent from 4.34 million units last year.

In Germany, on the XETRA, Volkswagen shares were gaining around 3.7 percent to trade at 99.50 euros.

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