volkswagen Shares fell on Monday after the troubled German carmaker issued another profit warning following its exit from Europe’s blue-chip index.
Shares fell 0.5% in morning trading, extending Friday’s 8.3% decline after Volkswagen cut its operating profit margin forecast to 5.5% to 1% from the previous estimate of 4%. The company attributed this to impairment losses related to its large shareholdings. porsche“further deterioration” in market conditions, particularly in China, and restructuring costs.
“As the shift in demand towards battery electric vehicles accelerates, the development of the Audi and Volkswagen passenger car brands in particular will result in lower results than initially expected,” the company added.
Separately, Volkswagen was expelled from the state. euro stox 50 This is a move announced earlier this month as part of the index’s annual update to reflect the euro area’s largest companies across key sectors.
Volkswagen shares have fallen 27.5% this year and are currently near their lowest since 2010.
VW stock price.
This comes despite the approval earlier this month of the next phase of a major restructuring and streamlining effort to cut 100,000 jobs, as Volkswagen grapples with declining profits, Chinese competitors, complex tariffs and a shift to electric vehicles.
Analysts at Deutsche Bank said on Monday that while the latest profit warning “looks grim at first,” it “significantly exaggerates the deterioration in the underlying business.”
The update includes a one-time effect of 10 billion euros that will impact this year’s earnings, but underlying profit margins remain at around 4% and cash generation is maintained, Deutsche added in the note.
But Volkswagen’s withdrawal from the Euro Stoxx 50 reflects the woes facing Europe’s auto sector, which has been hit in recent years by high costs, increased global competition and a struggle to meet rapidly changing consumer demand for electric vehicles and hybrids.
jeep and dodge manufacturers Stellantis dropped out of the blue-chip index a year ago amid its own challenges and restructuring.
Finland’s Nokia was chosen over Volkswagen in the Euro Stoxx 50. Nokia is getting a big boost in AI-related growth thanks to its key role in data center connectivity.
