Volkswagen Adjusts Full-Year Guidance After Third-Quarter Performance Setback
- Wednesday, October 16, 2024
Shares in Volkswagen (VW) experienced a decline on Monday following the revision of the company's full-year operating profit forecast. The German carmaker cited production losses caused by widespread flooding in Slovenia and increased product costs as the main factors behind the adjustment.
As of 0849 GMT, VW stock was trading 2.85% lower at EUR100.20.
According to preliminary figures, VW anticipates a third-quarter operating result of €4.9 billion ($5.19 billion) with an operating return on sales hovering around 6.2%.
Looking ahead to 2023, the company now expects the operating result to reach a level similar to the previous year's figure of €22.5 billion, in contrast to its previous forecast of an operating return on sales ranging between 7.5% and 8.5%. Financial analysts estimate that this range equates to €23.6 billion and €26.7 billion.
"While the warning may be concerning for Volkswagen specifically, it is unlikely to have significant implications for the wider sector, given the company's solid volume and revenues," noted Deutsche Bank analysts in a research note.
However, market participants had already anticipated a warning, considering VW's cautious stance at various conferences.
Citi analysts expressed surprise at the extent of the deterioration stated in the revised guidance, although they acknowledged that the third quarter typically experiences a lower operating margin.
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