Volkswagen is set to release its full results for the third quarter on Thursday, following the release of preliminary figures last week. Here are the important details you need to know:
Aftertax Profit Forecast
According to a FactSet poll of four analysts, Volkswagen is expected to report around 3.85 billion euros ($4.08 billion) for the quarter. Comparatively, the company achieved an aftertax profit of EUR2.13 billion in the third quarter of the previous year.
Key Points to Watch Out For
Profit Warning Fallout
Last week, Volkswagen revised its full-year adjusted operating profit forecast to EUR22.5 billion, causing a sharp drop in shares to levels not seen since the start of the pandemic. Previously, the company had forecasted an operating return on sales ranging from 7.5% to 8.5%, which equated to a profit of EUR23.6 billion to EUR26.7 billion. Analysts at Stifel noted that this warning was concerning as it deviated from previous communication and raised questions about the company’s transparency.
Cost-Cutting Update
Investors are eagerly awaiting further details on the EUR10 billion cost-savings initiative that was outlined earlier this year. Analysts at Stifel believe this will be crucial for Volkswagen’s overall turnaround.
Production Volumes
To meet their full-year guidance, Volkswagen will need to achieve an EBIT of approximately EUR6.30 billion in the fourth quarter, according to Citi analysts. This will require a rebound in production volumes. While achieving this target is feasible, factors such as weakened demand (as evident from the pause in production of certain models earlier this month) and challenging pricing conditions make it an arduous task.
For more information about Volkswagen’s performance in the third quarter, stay tuned for the official report on Thursday.
