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UPDATE 1-VW 9-month profit halves, misses consensus

(Adds share price reaction, detail from statement)

FRANKFURT, Oct 29 (Reuters) - Europe's biggest carmaker, Volkswagen AG , said on Wednesday its operating profit fell 53 percent in the first nine months due to weak demand, a strong euro and the cost of revamping its Brazilian operations.

Operating profits fell to 1.73 billion euros ($2.03 billion) from 3.714 billion in the same period last year, falling slightly short of analysts' expectations.

The company also said it expected operating profits in the full year to come in at just under half last year's level of 4.76 billion euros, due in part to a revaluation of upfront expenditures.

VW stock, which has outperformed European peers by seven percent this year, was down 0.6 percent at 43.84 euros by 0940 GMT compared to a 0.3 percent rise on the European index.

The group has said it will take a 120-million euro charge for overhauling its business in Brazil, where it is slashing nearly 4,000 jobs amid chronic overcapacity in the worst car market the country has seen for a decade.

French rival PSA Peugeot Citroen last week warned on profits for the second time in three months and said sales had fallen in the third quarter as it too battles a generally rocky autos market and the impact of a strong euro.

VW had been expected to post an operating profit of 1.783 billion euros in the first nine months, according to a Reuters poll of 28 analysts.