Volkswagen cites U.S. tariffs for decrease in operating profit
July 25 (UPI) -- Volkswagen said Friday its year-over-year operating profit fell by $1.84 billion in the second quarter, as the German automaker navigates the effects of tariffs imposed by U.S. President Donald Trump.
The company, headquartered in Wolfsburg, Germany, released its latest financial results Friday, showing a second-quarter operating profit of $4.49 billion, down from $6.33 billion during the same quarter last year, a 29% decline.
"Our half-year figures present a contrasting picture: on the one hand, we achieved strong product success and made progress in realigning the company," Arno Antlitz, who serves as the company's chief operating officer and chief financial officer, said in the statement Friday.
"On the other, the operating result declined by a third year-on-year -- also due to higher sales of lower-margin all-electric models. In addition, increased U.S. import tariffs and restructuring measures had a negative impact. Excluding these items, the operating margin in the second quarter is at nearly 7%, representing the upper end of our expectations."
The company's revenue for the first half of the year amounted to $185.7 billion), while operating profit for the first six months came in at $7.86 billion.
Second-quarter sales revenue of $94.8 billion fell short of analysts' expectations of $96.5 billion.
"Decline in operating result primarily due to high costs from increased U.S. import tariffs (1.3 billion euros), provisions for restructuring at Audi, Volkswagen Passenger Cars and Cariad, and expenses related to CO₂ regulation," Volkswagen said in Friday's financial results.
The European Union continues to negotiate with U.S. officials to try and reach a deal on import tariffs imposed by Trump.
On Thursday, EU countries indicated support to enact 30% retaliatory tariffs if no deal can be reached.
Earlier in the week. U.S. Secretary of Commerce Howard Lutnick said the United States is holding firm on a "hard deadline" imposed by Trump of Aug. 1 to impose a 30% baseline tariff on the European Union.
Shares of Volkswagen were up 34 cents, or 2.94%, Friday on the OTC market, trading at $11.92 as of mid-afternoon.
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