April 23, 2008 / 9:34 AM / in 10 years

Volkswagen's results in line, reaffirms 2008 targets

FRANKFURT (Reuters) - Volkswagen, the fourth-biggest carmaker in the world that is soon to be a unit of Porsche, posted preliminary first-quarter results in line with expectations and reaffirmed its full-year targets.

VW said on Wednesday operating profit rose 21 percent to 1.31 billion euros ($2.09 billion), a tick better than an average forecast of 1.30 billion euros from a Reuters poll of 18 analysts.

Its shares fell 1.8 percent to 187.81 euros by 0925 GMT, the leading decliner among European car stocks.

Thousands of painful job cuts in Germany under its former management as well as booming sales in emerging markets helped Volkswagen post its best year of results ever in 2007 and emboldened Chief Executive Martin Winterkorn to set his sights squarely on overtaking industry giant Toyota.

“We expect demand for group vehicles to increase substantially — especially in the Asia-Pacific, central and eastern Europe, and south America regions,” it said.

Volkswagen reiterated its forecast for higher vehicle sales, revenue and operating profit in 2008 as it rolls out new models like the four-door coupe Passat CC and the revival of the sporty Scirocco.

Quarterly revenue edged 1.4 percent higher while net profit gained 26 percent to 929 million euros.

Aided by VW’s powerful chairman and Porsche scion Ferdinand Piech, Winterkorn bought majority control of Swedish heavy truckmaker Scania early in March as part of a plan to offer both subcompacts and long-haul tractor trailers as well as everything in between.

On Thursday, Volkswagen will hold what is expected to be a tumultuous annual general meeting.

Reporting by Christiaan Hetzner; Editing by Paul Bolding

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