FRANKFURT -- Volkswagen AG said Wednesday that its pretax profit slipped 10 percent last year, in line with market consensus and just meeting its own target of about $4 billion.
The group, suffering from an aging product range as it battles weak demand and unfavorable exchange rates, posted pretax profit of $4.282 billion, against a consensus expectation of $4.258 billion in a Reuters poll.
Volkswagen said in October it still aimed to post pretax earnings of about $4 billion for 2002, although it cautioned that a further deterioration in stock markets could affect its financial result.
The company gave no outlook for 2003, unlike French rivals Renault and PSA Peugeot, which also reported a rise in operating profit last week.
"If a company is ready to pay an attractive dividend like this, it is a confidence-building signal," said Rolf Drees of Union Investment fund managers.
Volkswagen did not break out fourth-quarter results, but the full-year numbers imply a jump in pretax profit in the fourth quarter of close to 50 percent to $1.087 billion, according to Reuters calculations, slightly above expectations.
Group revenues for the year slipped 1.8 percent to $93.424 billion.
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Volkswagen said cash flow from operating activities at its automotive division rose just 0.4 percent to $8.665 billion year-on-year, suggesting a deterioration in the fourth quarter, although analysts were keen for more detail.
"In the absence of any comment at this stage people might worry that the quality of the earnings in the fourth quarter was low. There could be a very logical explanation but nevertheless it begs a question," Lehman Brothers analyst Chris Will said.
VW has said it will provide more details on its results next month when it holds its annual press conference.
Some analysts also were frustrated at the lack of outlook, especially after PSA Peugeot pleased the market last week with an upbeat forecast.
"PSA is the benchmark in terms of disclosure -- the limitations of (VW's) release and the fact that there is no outlook is very much in VW style," one German analyst said.
CEO Bernd Pischetsrieder said in January he was confident about earnings and sales this year.
The group's net profit fell 11.3 percent to $2.790 billion last year, above market expectations and implying a rise of almost a third in net profit in the fourth quarter.
"The fourth-quarter tax rate came in lower than for the full year and we need to know why," said UBS Warburg auto analyst Xavier Gunner.
Although VW put the brakes on a decline in unit sales in Western Europe toward the end of last year and has been benefiting from booming sales in China, analysts say buyer incentives have been eating into its profitability.
The group, which is depending on its recently launched Touran minivan to boost sales this year as its top-selling Golf and Passat models start to look long in the tooth, faces tough competition from peers like Renault, which also is trying to run down older models ahead of launches.
Volkswagen sold 4.98 million vehicles in 2002, a 1.9 percent drop from the previous year, and has said it aims to lift sales to more than 5 million this year.