FRANKFURT - Volkswagen AG saw its net profit rise sharply in the third quarter to €7.14 billion ($10 billion) boosted by a large accounting addition from revaluing options related to its stalled takeover of Porsche.
The company made €2.20 billion in the same period a year ago.
Sales revenue rose 25.3 per cent to €38.512 billion, and operating earnings, which exclude the option issue, jumped by 45 per cent to €2.9 billion from the year-ago quarter, ahead of analyst estimates of €2.5 billion.
With operating earnings of €9 billion in the first nine months, the company said it had already exceeded 2010 full-year earnings with three months still to go in the year.
"Our strong business performance shows the strength and stability of our strategy", said CEO Martin Winterkorn. The company reaffirmed its earnings prediction for significantly higher sales and operating profit this year, and the company's shares rose 5.9 per cent in morning trading to €112.05 on a rising German stock market boosted by news of a deal to give financially troubled Greece more debt relief.
Volkswagen showed unit sales growth in Western Europe of 8 per cent despite uncertainty from the ongoing government debt crisis, 29.7 per cent growth in Central and Eastern Europe, and 14.6 per cent in the Asia Pacific region including China.
Volkswagen's takeover of Porsche has been stalled by legal issues, although the companies already co-operate extensively. The company said it was revaluing put and call options related to the deal, which added €6.8 billion to its results.
Potential liability from legal proceedings over alleged share manipulation by Porsche make it difficult to quantify the risk Volkswagen would be taking in a share exchange. The companies say they are committed to going through with the combination and are looking at other ways to accomplish that.