Volkswagen eyes stable 2017 earnings after underlying profit hits record

Markets Reuters

FILE PHOTO: The Volkswagen logo is seen at the Frankfurt Motor Show (IAA) in Frankurt, Germany, September 10, 2013. REUTERS/Pawel Kopczynski/File Photo (Copyright Reuters 2017)

Volkswagen forecast broadly stable earnings this year after record sales of luxury Audi and Porsche cars helped it post its highest annual underlying operating profit ever.

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The carmaker expects to post an underlying operating margin of between 6 and 7 percent this year, compared with 6.7 percent last year, even as revenue growth accelerates to 4 percent, it said on Friday.

Volkswagen also reported operating profit before special items jumped 14 percent to a record level of 14.6 billion euros ($15.5 billion), broadly in line with forecasts, and hiked its dividend more than expected.

Record earnings before one-off items reflect progress VW has achieved on making its core brand leaner and more efficient.

But it booked bigger-than-expected one-off charges totaling 7.5 billion euros in 2016, of which 6.4 billion were related to the emissions-test rigging scandal. Analysts had on average forecast 4.2 billion euros in total.

(Reporting by Maria Sheahan; Editing by Edward Taylor)