Investing.com -- Volkswagen (ETR:VOWG_p) has reported a steep drop in first-quarter operating profit as the European carmaking giant said it was hit by a "slow start" to its 2024 financial year.
However, the group behind brands like Audi and Seat reiterated its full-year outlook despite facing challenges in the "economic situation," including rising competition and volatile energy markets.
Chief Financial Officer Arno Antlitz noted in a statement that VW's March order book was "solid," adding that order intake has improved in the past months and is already having a positive impact on second-quarter returns. More support will come when more than 30 new models across its subsidiaries are launched over the course of the year, according to Antlitz.
"We remain confident of achieving our financial targets for 2024," he said. Volkswagen expects to see annual sales increase by up to 5% and book a full-year operating margin of 7% to 7.5%.
In the January to March period, lower sales volumes and a jump in fixed costs weighed on returns. Operating profit slumped by more than 19% to 4.6 billion euros, although this was mostly in line with forecasts.
"[T]he weak [first quarter] print makes [full-year] targets appear more ambitious," analysts at UBS said in a note to clients.
Shares in Volkswagen were lower in mid-morning trading in Europe on Tuesday.