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VW Adds Another €2.2 Billion to Diesel Scandal Legal Fund
Volkswagen AG says it will set aside an additional €2.2 billion ($2.4 billion), mostly to cover rising legal costs in the U.S. associated with its diesel emission cheating scandal.
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Volkswagen AG says it will set aside an additional €2.2 billion ($2.4 billion), mostly to cover rising legal costs in the U.S. associated with its diesel emission cheating scandal.
The new contribution expands the fund to more than €18 billion ($19.8 billion). It also lowered VW’s earnings in the first half of 2016 by 22% to €5.3 billion ($5.8 billion).
VW expects full-year revenue to fall as much as 5% this year. The company blames the continuing fallout of its diesel scandal, combined with exchange rate fluctuations and weak sales in Russia and South America.
But first-half operating earnings, excluding special charges, grew 7% to €7.5 billion ($8.3 billion), significantly better than analysts predicted. Experts say the result shows VW’s efforts to streamline operations and improve efficiencies, especially for the Volkswagen brand, are working.
VW says its operating return on sales this year will be between 5% and 6%. The company plans to release full second-quarter financials on July 28.
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