On Friday, Volkswagen (VWAGY, Financial) further reduced its profit outlook due to anticipated lower car demand, future performance declines, and increased risks to its main brands from worsening macroeconomic conditions.

On September 27, Volkswagen (VWAGY, Financial) announced it would lower its revenue and delivery forecasts for 2024, citing the deteriorating macroeconomic environment and slowing growth in electric vehicles. The company now expects vehicle deliveries to decrease.

Annual Forecast Adjustments:

• Return on Sales (ROS): Expected to be 5.6%, down from the previous forecast of 6.5% to 7%, and below the analyst consensus of 6.51%.
• Vehicle Deliveries: Forecasted to be around 9 million units, compared to analysts' expectations of 8.1 million units.
• Net Cash Flow of Automotive Division: Estimated at around 2 billion euros, down from the previous prediction of 2.5 to 4.5 billion euros, and below analysts' forecast of 3.27 billion euros.
• Revenue: Expected to be approximately 320 billion euros for the year.

Volkswagen explained that the revised forecasts are due to the performance of its Volkswagen Passenger Cars, Volkswagen Commercial Vehicles, and Tech brands, along with the adverse macroeconomic conditions impacting its overall business and increasing risks to key brands.

Volkswagen plans to release a detailed financial report on October 30. Additionally, the financial performance will no longer include the results from Volkswagen Bank Rus, leading to an expected loss of 200 million euros that the company believes cannot be compensated for by other businesses.

Volkswagen Bank Rus, a subsidiary of Volkswagen, primarily provides car loans, leasing services, and other financial services to Volkswagen customers in Russia.

According to Bloomberg, analysts' consensus ratings for Volkswagen’s stock include eight 'buy' ratings, two 'hold' ratings, and one 'sell' rating.

Following this announcement, Volkswagen ADR plummeted by nearly 1.9% after initially rising over 3% intraday.