Volkswagen (VLKAY) shares have jumped well over 6% after it issued an unscheduled announcement saying that half-year results would be "significantly higher than market expectations."
Volkswagen said that group operating profit before special items would be €7.5 billion ($8.5 billion), compared with €6.99 billion a year earlier, "despite the ongoing economic impact from the diesel issue." Taking into account the special items of €2.2 billion relating to legal risks from North America, which were included in the first half results, operating profit will be €5.3 billion.
The Wolfsburg, Germany-based carmaker said that for 2016 it expects its operating return on sales to be between 5% and 6%.
The announcement, before full half-year figures on July 28, marked rare spot of good news for the car maker, which has been embroiled in a diesel emission scandal.
Volkswagen said improvements in the Volkswagen brand in the second quarter led to the higher results. There was also in increase in seasonal demand driven by an improved car market in Europe and stronger orders from large corporate fleets. And it reported "positive impacts from the efficiency program."
Volkswagen saw new registrations of its cars decline in June, with volumes for the Volkswagen models down by 2% and registrations of premium Porsche cars declining by 1.5%, according to figures from the European Automobile Manufacturers Association.
The car maker did warn on Wednesday that, along with ongoing fallout from the emissions scandal, that market competition and interest rate and exchange rate volatility, as well as fluctuations in raw material prices, could pose challenges. And it said it expects full-year sales to decline by up to 5%.
The announcement comes as attorneys in New York, Maryland and Massachusetts filed lawsuits against the company claiming the diesel emissions cheating goes back as far as 1999 and that management knew of the cheating.
Last month, Volkswagen reached a $15.3 billion settlement with U.S. authorities over the scandal. European politicians and consumer groups are calling for the same type of compensation for European customers.