VW reiterates full-year targets despite earnings slide

Earnings before interest and tax came in at €3.9bn at the German company, down on the €4.2bn recorded a year earlier as another €1bn was put aside to cover legal costs associated with the 2015 emissions testing scandal. The figure was, however, in line with analyst expectations.

Deliveries to customers were down 2.8% at 2.6m vehicles, but group sales revenue rose 3.1% to €60bn.

VW also reiterated full-year targets for deliveries to customers, sales revenue and operating profit before one-off charges.

Chief financial officer Frank Witter, said VW had got "off to a good start" this year. He continued: "The sales revenue performance and earnings growth in the first three months of the current fiscal year are encouraging.

"Overall we have to continue to pick up pace when it comes to our transformation. We are also facing challenging conditions in connection with increasing global economic risks. Nevertheless we maintain our targets for 2019."

Investors were reassured by the update, and by 1130 BST the stock was trading more than 4% higher at €162.

Sales revenue from Volkswagen passenger cars rose 7.1% to €21.5bn, as "improvements in mix and price positioning as well as positive cost development" helped overcome lower volumes and negative exchange rate effects.

The Seat and Skoda brands also saw sales revenue rise, but the higher-end Audi and Porsche marques fared less well. At Audi, sales revenue fell to €13.8bn from €15.3bn, while Porsche saw operating profits slide 11.6% to €829m "due to market and production-related declining volumes".

Volkswagen admitted in 2015 using software to cheat emission tests for diesel cars. The scandal has already cost it billions as well as leading to a world-wide backlash against diesel.