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Volkswagen warns of lower profit after Q2 earnings fall by one-third

Volkswagen warns of lower profit after Q2 earnings fall by one-third

FRANKFURT: The Volkswagen Group on Friday reported a sharp decline in second-quarter net profit, weighed down by weak performance at its premium brands Porsche and Audi, high costs from increased US import tariffs, and higher sales of lower-margin electric models, reported German news agency dpa.
The German carmaker posted net profit of €2.29 billion (US$2.70 billion), down about a third from a year earlier. Operating profit fell around 29 per cent to €3.83 billion, resulting in an operating margin of 4.7 per cent, in line with analyst expectations.
Revenue declined 3 per cent to €80.60 billion, despite slightly higher vehicle deliveries.
Volkswagen warned of lower full-year profitability, citing weaknesses at Porsche and Audi as well as tariffs on imports to the United States. President Donald Trump has imposed a 25 per cent levy on auto imports in a bid to boost the domestic industry.
Europe's largest carmaker now expects an operating margin of between 4 per cent and 5 per cent, down from a previous forecast of 5.5 per cent to 6.5 per cent. Analysts had already predicted margins below 5 per cent.
Chief executive Oliver Blume also trimmed the revenue outlook, now expecting flat sales versus last year rather than growth of up to 5 per cent.
— BERNAMA-dpa
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