VW Hikes Operating Profit Slightly

Volkswagen AG boosted operating earnings 3% year over year to €3.3 billion ($4 billion) in the second quarter of 2012. Operating margin narrowed to 6.8% from 7.9% year earlier.

VW says investment in new vehicles and intensifying price pressure in Europe offset some of its gains from stronger sales. Revenue soared 19% to €48.1 billion ($58.7 billion) as global volume climbed 13% to 2.39 million vehicles.

Net income surged 20% year over year to €5.6 billion ($6.8 billion) in the April-June period, boosted in part by earnings from VW's Chinese joint ventures and a higher valuation of the company's Porsche AG options.

The company doesn't report quarterly results by brand or region. In the first half, Audi outshone the VW brand with a €2.9 billion ($3.5 billion) operating profit and a robust 11.6% return on sales. The VW passenger car unit posted income of €2.2 billion ($2.7 billion) and only a 4.2% margin.

Volkswagen Group increased revenue in all regions in the first six months of 2012, including Europe (14% to $72.2 billion) Asia Pacific (56% to $19.9 billion), North America (37% to $13.8 billion) and South America (22% to $10.5 billion).

The company stands by its earlier full-year forecast that operating earnings will match last year's record €11.3 billion ($13.8 billion), citing strong demand in China and the U.S. But analysts tell Bloomberg News that VW's vehicle sales growth could slow to 5% in the second half of this year from 10% in the first six months.