German automaker Volkswagen AG says net profit fell 50 percent in the second quarter compared to the previous year, when earnings were boosted by a one-time accounting plus related to its takeover of Porsche.
Excluding the Porsche effect, the company's operating earnings rose 1.8 percent in what it called "a difficult market environment," beating analyst estimates and indicating the company was holding its own in a difficult European auto market. It said it would still achieve its earnings goal for the year.
Net profit fell to 2.85 billion euros ($3.76 billion) from 5.70 billion in the same quarter a year ago. Revenue rose 8.5 percent to 52.1 billion euros.
Operating earnings, excluding Porsche as well as financial items such as interest and taxes, rose to 3.44 billion euros. That beat analyst estimates for 3.07 billion euros, as compiled by financial information provider FactSet. Profit margin slipped moderately to 6.6 percent from 7.0 percent.
The results showed how Volkswagen is continuing to maintain profits despite a tough environment at home in Europe and Germany, where car sales have been shrinking. It is sustained in part by luxury businesses such as Porsche and its Audi division, where unit sales are smaller but the company earns much more per vehicle, and by its business in emerging markets such as China.
CEO Martin Winterkorn said Wednesday the company had "achieved a solid result in a difficult market environment." The company said that full-year operating earnings, which exclude financial items such as interest and taxes, would at least equal last year's.
The company had enjoyed a large boost in the second quarter of 2012 thanks to the recalculation of stock options related to its takeover of high-end sports car maker Porsche, which is now one of VW's 12 brands. The company also makes cars under the Skoda and SEAT nameplates.