Volkswagen revealed first-quarter operating profit nearly tripled, driven by a sharp gain in sales and a restock of its inventories, and reiterated it expects to improve key results in 2010.
The good start to the year confirms we are on the right track and have been able to capture an above-average share of growth on automotive markets compared with the first quarter of 2009, Chief Executive Martin Winterkorn said in a statement on Wednesday.
Preliminary results showed group operating profit rose to 848 million euros ($1.14 billion) from 312 million a year ago, beating the average estimate of 606 million euros in a Reuters poll of seven analysts.
The group reaffirmed its target for higher deliveries, revenue and operating profit for 2010.
Net automotive cash rose to 14.24 billion euros by the end of March, helped by 3.0 billion in proceeds from its capital increase.
Final quarterly results are due on April 29.
VW has forecast only a slight recovery in the global market this year, driven by demand in Asia, while France's Peugeot, which is heavily exposed to Europe, refrained from giving a 2010 target in favor of one for just the first half.
German rival Daimler raised its earnings forecast for its luxury car and heavy truck businesses late on Monday, lifting shares in the European automotive sector index .SXAP.
Analysts say investors should pick stocks rather than bet on a broader industry recovery, since some mass-market car brands in Europe may see demand plunge as government scrapping schemes expire through 2010.
Volkswagen aims to topple Toyota from the pinnacle of the auto industry by 2018 and is on an acquisition spree to that end.
When the deal is completed, it is expected to spend about 16 billion euros in equity and debt just to purchase Porsche's iconic sports car business and non-listed Porsche Holding, Europe's largest auto dealership.
Volkswagen recently raised 4.1 billion euros in net proceeds from the sale of nearly 65 million new preferred shares, more than recuperating the funds spent in December to buy half of Porsche sports cars.
Additionally it spent 1.7 billion euros to buy a 20 percent stake in Suzuki in January, and many expect VW could launch, either this year or next, a bid for German truckmaker MAN, in which it already holds 30 percent.
(Reporting by Christiaan Hetzner)