FRANKFURT, Germany (AP) — German automaker Volkswagen saw its first-quarter profit jump 44 percent as the company continued to work past its scandal over diesel cars rigged to cheat on emissions tests.
Costs and fines from the scandal that emerged in Sept. 2015 has dinged VW's large cash pile since but the chief financial officer said Wednesday that the company was solid enough to handle added costs this year. VW also reaffirmed its profit goal for the full year.
After-tax profit rose to 3.4 billion euros ($3.7 billion), up from 2.4 billion euros in the year-earlier quarter. The results beat analyst estimates for 3.1 billion euros profit compiled by financial information provider FactSet.
The Wolfsburg-based company said the improved result came from tighter cost controls, a sales mix favoring its more-profitable models and favorable shifts in currency exchange rates.
It also saw a better profit performance from its namesake Volkswagen brand. Operating earnings rose to 869 million euros from a meager 73 million euros in the year-ago quarter. The VW brand has struggled with high costs and low profit margins. Volkswagen's other brands include luxury makes Audi and Porsche, as well as Skoda, SEAT and Lamborghini.
Fines and related costs from the scandal reduced the company's cash pile somewhat but CFO Frank Witter said the group retained "a strong financial foundation" despite facing further scandal outlays this year in double-digit billions. Net cash fell by 3.9 billion euros to 23.6 billion euros.