Volkswagen Fourth-Quarter Profit Nearly Triples

Volkswagen, Europe's largest automaker, said Friday its fourth-quarter profit nearly tripled on strong vehicle sales.

Profit after tax in the final quarter of 2006 rose to 1.54 billion euros ($2.03 billion), up from 4.35 million euros in the same period the previous year, the Wolfsburg-based company said in a statement. Sales in the quarter rose 11% to 27.85 billion euros ($36.6 billion).

VW shares rose 2.77% in afternoon Frankfurt trading to 102.77 euros ($135.16).

Operating profit before special items in the fourth quarter came in at 1.36 billion euros ($1.79 billion) compared with 1.03 billion euros a year earlier. Including the items of 711 million euros ($935.11 million), which the company did not detail, operating profit fell to 652 million euros ($857.51 million) from 674 million euros a year earlier.

Pretax profit in the fourth quarter jumped to 856 million euros ($1125.81 million) from 612 million euros.

Volkswagen said in February full-year 2006 profit more than doubled to 2.75 billion euros ($3.62 billion) from 1.12 billion euros in 2005. Sales rose more than 12% on the year to 104.9 billion euros ($137.96 billion).

Volkswagen confirmed that it expects deliveries to customers to increase slightly in 2007 and reiterated it aims to exceed last year's operating profit before special items and revenues.

"We cut costs, increased productivity and quality," management board chairman Martin Winterkorn said in a statement. "The Volkswagen Group sold more vehicles worldwide in 2006 than ever before."

Volkswagen said that vehicle sales in the first two months of the year were 8.3% higher than in the same period last year at around 862,000. In 2006, Volkswagen's vehicle sales rose 9.4% on the year to 5.7 million, boosted by strong gains in China, South America and South Africa. The company's global market share for passenger cars rose to 9.7% from 9.1% in 2005, it said.

Horst Neumann, Volkswagen's executive board member responsible for human resources, said the company will cut 5,000 jobs between 2007 and 2009 as part of its already announced restructuring effort that includes total job cuts of 20,000.

He said the cuts will be achieved with measures such as partial retirement and will not require layoffs.