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Volkswagen Q3 Pre-tax Profit Down, Cuts FY21 Revenue, Delivery View; Stock Down

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Shares of Volkswagen AG were losing around 3 percent in German trading after the automaker reported weak profit before tax in its third quarter reflecting lower sales revenue, production and deliveries amid the ongoing chip shortage.

Looking ahead for fiscal 2021, Volkswagen reduced the sales revenue forecast for the Group and the Passenger Cars Business Area amid deterioration in the supply situation as a result of the semiconductor shortage. Full-year sales revenue of the Group and the Passenger Cars Business Area are expected to be considerably higher than the prior-year figure. Previous estimate was sales revenues to be significantly higher than the prior-year figure.

Further, the company continues to anticipate an operating return on sales in the range of 6 percent to 7.5 percent for the Group and in the range of 6 percent to 8 percent for the Passenger Cars Business Area in 2021.

Meanwhile, the company lowered its forecast for deliveries to customers and anticipates them to be in line with the previous year in 2021 amid market conditions that continue to be challenging. The previous estimate was deliveries to be significantly higher than the prior year.

The global volume of new vehicle sales is expected to be moderately up on the previous year without reaching the prepandemic level.

In the German passenger car market, a moderate decrease in demand is expected in 2021. The volume of demand in the markets for passenger cars and light commercial vehicles in North America in 2021 is likely to be moderately higher than the previous year's level.

For the third quarter, earnings after tax grew 5.6 percent to 2.90 billion euros from last year's 2.75 billion euros. Earnings before tax, meanwhile, fell 14.6 percent from last year to 3.08 billion euros.

Operating result fell 18.5 percent to 2.60 billion euros, and operating return on sales dropped to 4.6 percent from 5.4 percent last year. Operating profit before special items came to 2.8 billion euros, down from 3.18 billion euros last year.

Operating return on sales before special items was 4.9 percent, down from 5.4 percent a year ago.

Sales revenue was down 4.1 percent to 56.93 billion euros from 59.36 billion euros a year ago, hurt by global semiconductor bottlenecks.

Production declined 35.1 percent to 1.59 million units from 2.45 million units a year ago. Deliveries fell 24.4 percent to 1.97 million units, and vehicle sales declined 30 percent to 1.81 million units.

The company delivered 122,100 all-electric vehicles or BEVs in the third quarter, more than twice the number in the prior-year period.

In the first nine months, deliveries grew 6.9 percent on the pandemic-related weak prior-year figure, reaching 6.95 million vehicles. Sales figures for both the Passenger Cars Business Area and the Commercial Vehicles Business Area exceeded the previous year's levels.

In Germany, Volkswagen shares were trading at 197.08 euros, down 3.34 percent.

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