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Volkswagen beats earnings estimate

The post-Piëch era has gotten off to a good start for VW thanks to cost-cutting efforts and higher demand. The German car giant posted its first quarterly results since the sudden resignation of the company's chairman.

Germany's biggest carmaker Volkswagen earned 52.7 billion euros ($57.9 billion) in the first three months this year, a year-on-year increase of 10.3 percent, the Wolfsburg-based company said on Wednesday.

The strong numbers beat analysts' expectations and mark a promising start to a new era for the 12-brand group following last week's

surprise resignation of long-standing chairman Ferdinand Piëch.

Global demand for the firm's passenger cars was up 3.7 percent compared to the same period last year, including most of the firm's key markets - notably North America, raising hopes of a turnaround there for the German automaker after months of sluggish results.

Meanwhile, stagnant sales in Eastern Europe and South America continued to prove a drag on profits.

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Unforeseen End of an Era for Ferdinand Piëch

"Our key figures for the first quarter show that the Volkswagen Group remains on course, despite the headwinds," said CEO Martin Winterkorn.

Operating profit climbed nearly 17 percent to 3.3 billion euros, while operating return on sales jumped more than 6 percent - a sign that Winterkorn's cost-cutting course is paying off. Volkswagen said the measures had saved the company more than 100 million euros in the last quarter alone.

The group's luxury brands Audi and Porsche again drove much of the strong growth.

It's the first quarterly earnings report since the automaker's patriarch, Piëch, abruptly announced on Saturday he was stepping, following an intense

power struggle with Winterkorn

that threatened to damage the world's second-biggest car manufacturer.

pad/uhe (AP, AFP, dpa, Reuters)

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