Volkswagen shares lost ground in Tuesday's trading session after the automaker reported a 20 percent drop in profits for the first quarter and said 2016 will be a 'demanding' year. Volkswagen shares first came under pressure last fall on an EPA discovery that the company had used a so-called 'defeat device' on its engines to improve emissions results. Volkswagen's quarterly pretax profit of roughly $3.7 billion fell about 20 percent year-over-year. The automaker also plans to compensate more than 500,000 U.S. owners of its diesel cars, marking the start of what CEO Matthias Mueller predicts to be a 'demanding' 2016. The company highlighted the impact of reduced sales in Brazil and Russia for contributing to much of the decline. Mueller said in a statement Volkswagen 'managed to limit the economic effects of the diesel issue and achieve respectable results.' 2016 appears to be a year of transformation for Volkswagen, and the Fill or Kill team will be taking a close look at the automaker's sales outlook, which is expected to decline five percent for 2016. Volkswagen pointed to waning sales expectations in three of its passenger brands: Audi, Seat and Skoda. TheStreet's James Passeri has details from Wall Street.
This article was written by a staff member of TheStreet.