Volkswagen AG lowers its full-year revenue and delivery volume expectations for the second time, causing its stock price to plummet nearly 2% intraday

On Friday, September 27th, Eastern Time, German automotive giant Volkswagen announced a downward revision of its revenue and delivery volume expectations for 2024, citing the deteriorating macroeconomic environment and slowing growth in electric vehicles. The company anticipates a decrease in vehicle deliveries.

Revised Full-Year Expectations:

Sales Net Profit Margin (ROS): Volkswagen expects a full-year sales net profit margin of 5.6%, lower than the previous forecast of 6.5% to 7%, and below the analysts' average expectation of 6.51%.

Vehicle Delivery Volume: The estimated full-year vehicle delivery volume is around 9 million units, compared to analysts' expectation of 8.1 million units.

Automotive Division Net Cash Flow: The projected net cash flow for the automotive division is approximately 2 billion euros, down from the previous forecast of 2.5 billion to 4.5 billion euros, with analysts expecting 3.27 billion euros.

Operating Income: The estimated full-year sales revenue is approximately 320 billion euros.

Volkswagen explained that the reason for this expectation adjustment is the performance of its brands - Volkswagen Passenger Cars, Volkswagen Commercial Vehicles, and the Tech brand - which has impacted the company's overall performance. Coupled with the deteriorating macroeconomic environment, this will have a negative impact on the company's operations and pose more risks to its key brands.

Volkswagen plans to release a detailed financial report on October 30th. Additionally, as Volkswagen Bank Rus in Russia is no longer included in the company's financial statements, Volkswagen's financial performance will no longer include the bank's results. The company expects a loss of 200 million euros and believes it cannot offset this loss through other businesses.

Public information indicates that Volkswagen Bank Rus is a subsidiary of Volkswagen. Volkswagen Bank Rus is a financial services institution established by the Volkswagen Group in Russia, primarily providing car purchase loans, leasing services, and other related financial services to Volkswagen customers in Russia.

In terms of analyst ratings, according to Bloomberg's consensus estimates, the current market ratings for Volkswagen stock are 8 buy, 2 hold, and 1 sell.

Following this news, Volkswagen's ADR plummeted nearly 1.9% after rising over 3% intraday.