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Though Revenues Slip, VW Beats Q2 Earnings Expectation

Audi drives profit surge.

by on Jul.31, 2014

VW CEO Martin Winterkorn wants to balance profitability and aggressive growth going forward.

The world’s second-largest automaker beat expectations with a strong second quarter profit, up 14.1%, despite a decline in revenues.

The Thursday release of Volkswagen AG’s earnings revealed that its biggest luxury line, Audi AG, helped offset some problems at its namesake brand. The report came as VW begins a major effort to shift its focus from raw growth to a more profitable expansion plan, with Chief Executive Officer Martin Winterkorn planning to cut costs and boost productivity.

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“In light of the continued strong competitive pressures, the tense situation in some emerging economies and the fundamental technical and economic changes happening in our industry, we are working hard to create all the conditions we need today to ensure success tomorrow,” the CEO said in a statement accompanying the earnings release.

VW earned 3.25 billion Euros, or $4.35 billion, during the second quarter, up from 2.85 billion during the same period a year ago. The consensus of 13 industry analysts polled by the Bloomberg news service had anticipated earnings of 3.31 billion Euros.

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Audi Profits Slip, but Share Grows

Automaker putting off indefinitely a U.S. assembly line.

by on Jul.31, 2009

Audi is counting on its expanding line-up, including products like the upcoming A5 Sportback, to help it gain global market share and keep its balance sheet in the black.

Audi is counting on its expanding line-up, including the upcoming A5 Sportback, to help it gain global share and keep its balance sheet in the black.

The global slump may have taken a toll on Audi’s sales and profits, but the automaker insists the downturn could play to its advantage, longer-term.

The German maker, a semi-autonomous arm of giant Volkswagen AG, reported that it was able to stay in the black, during the first half of 2009, unlike many of its competitors, though profits still slipped by 25%. Sales slipped 9.7% from January through June, noted Chief Financial Officer Axel Strotbek, but that was also a fair bit better than the overall, 18% industry downturn, he stressed, during a conference call with American journalists.

“We want to use this opportunity to emerge from the current crisis considerably stronger,” the executive said, “a winner in the long-term.”

At the current exchange rate, Audi AG posted a net first-half profit of $979.5 million, or €697 million. During the same six-month period last year, Audi’s net was €903 million.

Meanwhile, unit sales fell from 516,219 to 466,000, a nearly 10% dip. The decline varied sharply from country to country, Strotbek noted. In fact, volume increased in China by 10.5%, where Audi now holds a 42% share of the premium car market. Early in the year, the Chinese government took aggressive steps to revive faltering momentum in the country’s automotive market – now the single largest national market in the world. It is now Audi’s second-largest market, after Germany.

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