Volkswagen has lifted its profit target for the year after cost cuts at its core autos division helped it outstrip third quarter earnings forecasts.
The world's largest carmaker is spending billions of euros to reposition itself two years after a diesel emissions scandal.
It is focusing on electrification of its mass-market and luxury brands while developing what it calls "digital mobility services" for those who do not want to own a vehicle.
"Earnings in the first nine months make us quite optimistic about the year as a whole," Volkswagen finance chief Frank Witter said. "This is a strong foundation we can build on."
Quarterly group earnings before interest and taxes (EBIT) before special items jumped 15% to €4.31 billion from €3.75 billion a year ago, Volkswagen (VW) said today.
That beat even the highest estimate of €4.17 billion in a Reuters poll of banks and brokerages.
Volkswagen said it booked €2.6 billion in the three months ended September 30 to fix diesel engines in the US, confirming an announcement made last month that will raise total provisions for its "Dieselgate" scandal to €25.1 billion.
Wolfsburg-based VW said it expected the group's operating margin to moderately exceed a target of between 6-7%, having previously said the margin would hit that range.
Volkswagen said its results benefited from cost cuts, agreed a year ago with labour unions, and growing vehicle sales.
Analysts said that today's results show that customers at least abroad are ready to forgive VW the diesel scandal.
Quarterly Volkswagen brand deliveries rose 7.3% on strong demand from China, the US and South America, almost triple the 2.7% gain in year-to-date sales, helped by solid orders for the new Tiguan SUV.
The company is in the midst of cutting thousands of jobs through natural attrition.
It has also ceased unprofitable models, reduced parts complexities and streamlined model development to lift the brand margin to at least 4% by 2020 and 6% by 2025, after 1.8% last year.
Group revenue may exceed last year's €217.3 billion by more than 4%, VW said, keeping its previous guidance. Nine-month revenue was up 6.8% to €170.9 billion.
While the company is producing a strong operating performance, the carmaker is facing a barrage of lawsuits from customers, investors and regulators over its "Dieselgate" scandal and is staking its future on a costly electric-vehicle (EV) programme.
Together with rivals Daimler and BMW, it has also become the target of investigations by European and German competition staff into alleged collusion.
