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Volkswagen shares rise despite billions of losses

Volkswagen's share price rallied on Wednesday despite an operating loss of 3.48 billion euros ($3.84 billion) in the third quarter, as a scandal over falsifying its diesel emissions knocked the company.

The carmaker was forced to take its first quarterly loss for 15 years, slightly deeper than analysts' forecasts, as it anticipated hefty payouts to consumers around the world over the deceptive data on its diesel emissions and the potential recall of 11 million cars. This set of results factored in a 6.7 billion euros writedown related to the scandal, lower than some had feared. After a couple of hours of trade, the stock was up close to 4 percent.

Sales revenues in the first nine months of the year were up 8.5 percent, and the carmaker reaffirmed its full-year new car deliveries of around 10.14 million. One positive step for investors could be the carmakers' discussions with European Union member states' authorities to limit legal action beyond what has already been agreed with Germany's KBA (Federal Motor Transport Authority).

Timothy Rea, analyst at BNP Paribas, described the results as "messy as expected" in a research note Wednesday, but added "importantly, liquidity remains strong (better than we expected) and VW emphasizes this will help it to manage the situation it finds itself in".

Finished Volkswagen cars arrive at the end of the assembly line prior to a visit by Volkswagen Group Chairman Matthias Mueller and Lower Saxony Governor Stephan Weil at the Volkswagen factory on October 21, 2015 in Wolfsburg, Germany.
Getty Images

Since the scandal emerged, Volkswagen has appointed a new chief executive, Matthias Mueller, and promised to step up cost-cutting efforts.

Mueller said in a statement: "The figures show the core strength of the Volkswagen Group on the one hand, while on the other the initial impact of the current situation is becoming clear. We will do everything in our power to win back the trust we have lost."

Winning back that trust in both its cars and its share price could be difficult.

"Volkswagen is facing a big black hole that it's going to have to throw money at for the foreseeable future, and at the moment it has no idea how deep that hole is," Laith Khalaf, senior analyst, HargreavesLansdown, wrote in a research note.

Shares in the carmaker, which was mounting a serious attempt to become the world's biggest before it emerged that it had cheated on emissions tests of some diesel cars, have lost around a third of its value since the scandal emerged last month.

Akio Toyoda, the chief executive of rival Toyota, told reporters at the Japan Car Show on Wednesday: "Just because something like this happens, we are not going to negate it all. But our priorities are hybrids and fuel cell cars. I am not in a position to comment on VW. Toyota has gone through its own quality issues. We are still in the midst of improvement. I want to make better cars so that we never have to go through that kind of incident again."

- By CNBC's Catherine Boyle