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VW earnings fall in 1999
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February 23, 2000: 4:45 a.m. ET
Europe's largest automaker hit by tax charge; shares continue to slide
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LONDON (CNNfn) - Volkswagen shares slipped Wednesday following a worse-than-expected 26 percent fall in 1999 profits due to a large tax charge at Europe's largest automaker.
VW posted net earnings of 1.651 billion German marks ($847 million) last year, while sales climbed 9.7 percent to 147 billion marks. But in its announcement after the market closed Tuesday, Volkswagen it said profits and unit sales would pick up this year.
The company said profits were depressed by a 389 million mark tax charge, not anticipated by analysts polled by Reuters who had forecast net earnings of 2.243 billion marks.
VW (FVOW) shares dropped 4 percent in early trade Wednesday to 43.3 euros and were downgraded to "sell" by analysts at WestLB. While western European auto sales have been buoyant this year, the sector has been out of favor with investors due to weakness in profits. VW stock has fallen 15 percent so far this year.
VW, which also owns the Audi, Seat, Skoda, Lamborghini and Bentley brands, extended its lead in Europe last year with a market share of 17 percent. Deliveries climbed 6 percent to a record 4.86 million in 1999, but its European performance was hit by weak emerging-market sales. "There has been a positive development for VW sales in Europe, but price pressure was a problem last year and it will continue this year," analyst Georg Stuerzer at HypoVereinsbank told Reuters. 
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Volkswagen
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