After reporting a rosy picture for the first half of 2016, a different reality has set in for Volkswagen AG, the embattled automaker reported today that second-quarter profits fell by more than half year-over-year, largely the result of its ongoing emissions cheating scandal.
The news came just days after a federal judge in California approved a $14.7 billion settlement to resolve the rigging of 475,000 vehicles with 2.0-liter turbodiesels to illegally pass U.S. emissions tests. That expense was largely covered by money set aside against 2015 earnings. But VW still has to settle a number of other lawsuits and solve problems involving its higher-end 3.0-liter diesel.
After taxes, VW said it earned $1.2 billion euros, or $1.32 billion between April and June, down from 2.7 billion euros the year before. On an operating basis, the figure many analysts prefer to focus on, the impact was less severe, though down 12%, nonetheless, at 808 million euros, or $895.5 million, compared with 914 million euros during the period a year ago. (more…)