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Frankfurt - Volkswagen predicted a significant rise in operating profits this year driven by strong demand around the world for its Audi and VW cars.
While that demand is expected to underpin strong sales volumes, VW again cautioned that high costs for raw materials as well as volatile interest and exchange rates, could put a squeeze on margins.
VW's operating margin grew to 7.9% in the second quarter from 6.0% a year earlier.
Shares in Europe's biggest car maker were down 6% after the company unveiled a 59% rise in second quarter operating profit to €3.17bn. However, this fell short of the €3.22bn consensus in a Reuters poll.
VW was underperforming the STOXX Europe 600 Automobiles and Parts index, which was down 2.8%, but one Frankfurt-based trader said he was sanguine about the margin squeeze.
"As usual the outlook includes a mixed tone but one should not read too much into this," he said.
Max Warburton at Bernstein Research said: "While the second quarter did not show the advance that some of us were anticipating, profitability remains robust"
Vehicle deliveries were up 15% in the quarter, boosted by the launch of a new Passat in China, the launch of the new Beetle in the US and Europe as well as solid demand for premium brand Audi.
Volkswagen said it expected global demand for passenger cars to be higher this year than in 2010, adding positive growth trends in China and India are set to continue.
While that demand is expected to underpin strong sales volumes, VW again cautioned that high costs for raw materials as well as volatile interest and exchange rates, could put a squeeze on margins.
VW's operating margin grew to 7.9% in the second quarter from 6.0% a year earlier.
Shares in Europe's biggest car maker were down 6% after the company unveiled a 59% rise in second quarter operating profit to €3.17bn. However, this fell short of the €3.22bn consensus in a Reuters poll.
VW was underperforming the STOXX Europe 600 Automobiles and Parts index, which was down 2.8%, but one Frankfurt-based trader said he was sanguine about the margin squeeze.
"As usual the outlook includes a mixed tone but one should not read too much into this," he said.
Max Warburton at Bernstein Research said: "While the second quarter did not show the advance that some of us were anticipating, profitability remains robust"
Vehicle deliveries were up 15% in the quarter, boosted by the launch of a new Passat in China, the launch of the new Beetle in the US and Europe as well as solid demand for premium brand Audi.
Volkswagen said it expected global demand for passenger cars to be higher this year than in 2010, adding positive growth trends in China and India are set to continue.
