Reuters reports that Volkswagen officials said this week that they expect the company's operating profits to jump this year. The uptick in earnings, according to industry experts, is fueled by soaring demand for its Audi and VW cars.
VW released its latest fiscal earnings report this week and reported that its second quarter operating profit surged 59 percent to roughly $4.5 billion. Even with the precipitous jump, however, VW shares still fell as analysts had projected the company's operating profit would hit $4.6 billion.
VM said that even as it experiences brisk car sales, rising commodity costs were preventing the company from achieving business cost reductions. Manufacturing cost reductions have helped to increase profit margins, but volatile price swings in critical components like metals are affecting earnings.
"While the second quarter did not show the advance that some of us were anticipating, profitability remains robust," Bernstein Research's Max Warburton affirmed.