Volkswagen Profit Warning not as Severe as Headline Numbers Suggest

Dow Jones09-21

0738 GMT - Volkswagen's profit warning initially looks severe, but Deutsche Bank believes the headline significantly overstates the deterioration in the underlying business. The automaker now guides for an operating margin of up to 1% in 2026 versus previous guidance of 4.0%-5.5% and consensus at around 4.1%. Around 10 billion euros of special items will weigh on earnings this year, implying an underlying margin of roughly 4%, broadly in line with expectations, Deutsche Bank adds. The bank doesn't think the announcement materially alters the core investment debate, as investors expected a restructuring would involve substantial charges and write-downs. "The key question remains whether management can protect cash generation while gradually improving underlying profitability. On both metrics, the ad hoc was arguably more reassuring than the headline numbers suggests." Shares fall 1.2%.

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