Volkswagen (VWAGY – Free Report) has reported a fourth-quarter 2024 earnings per share (EPS) of 67 cents, lower than the year-ago quarter’s EPS of $1. Revenues of $93.21 billion declined 0.7% from the prior-year quarter’s revenues of $93.88 billion, primarily due to a decline in vehicle sales.
For the full year, however, VWAGY’s sales revenues grew 0.7% on a year-over-year basis to $352.8 billion. The automaker reported a 15% year-on-year drop in its 2024 annual operating profit, citing rising costs and restructuring-related expenses, resulting in an operating margin of 5.9%.
The company sold nine million vehicles in 2024, marking a 3.5% drop from 2023. Sales growth in South America was not enough to offset the declines in China. Meanwhile, North American and European sales remained stable. Despite the challenges, Volkswagen saw an 88% increase in orders for battery-electric vehicles in Western Europe.
The company has proposed a 30% cut in dividends, recommending €6.36 per ordinary share and €6.36 per preferred share. The payout ratio will be approximately 30%.
For 2025, VWAGY expects sales revenues to grow by up to 5% compared to 2024. It also anticipates its operating margin to be between 5.5% and 6.5% in the year. VWAGY expects strong growth in 2025 to a battery-electric vehicle share of 10% to 14% globally. The company, however, is also preparing for headwinds in the year, as the Trump administration’s 25% tariffs on auto imports from Mexico and Canada are set to significantly disrupt Volkswagen’s supply chains and increase costs.
Furthermore, increasing competition, especially in the EV space from emerging Chinese manufacturers like BYD and NIO, volatile commodity prices, and emissions-related regulations like the EPA 2027 are also likely to create challenges for the company.
VWAGY’s 2024 Highlights
Volkswagen’s 2024 was marked by noteworthy new model launches and strategic partnerships. The company launched over 30 new models across its brands, including Volkswagen, Skoda, CUPRA, Audi and Porsche. The revamped lineup has improved product quality and, per the company, it has been receiving positive feedback from customers.
In China, VWAGY strengthened its regional tech partnerships with companies like XPeng and Horizon Robotics. The launch of the company’s Hefei innovation hub aided it in accelerating its development time in the country. Meanwhile, in North America, Volkswagen strengthened its position with the revival of the Scout brand, driving growth in the pickup and SUV segments.
Strategic collaborations played a crucial role in the reported year for the company, with partnerships with XPeng for China and Rivian for global markets contributing to innovative advancements in software and electronic architecture. Volkswagen’s software collaboration with Cariad, focused on autonomous driving, infotainment and cloud services, is aimed at ensuring future competitiveness.
The company’s push for electrification also continued in 2024, with EV sales stabilizing and new models like the Porsche Macan, Audi Q6 e-tron and Skoda ELROQ aimed at driving growth in 2025.
Zacks Rank and Stocks to Consider
VWAGY currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are Blue Bird (BLBD – Free Report) , General Motors (GM – Free Report) and Zapp Electric Vehicles Group Limited (ZAPP – Free Report) . BLBD, GM and ZAPP currently carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for BLBD’s fiscal 2025 EPS is currently pegged at $4, unchanged over the past 30 days and suggesting growth of 15.61% on a year-over-year basis.
The Zacks Consensus Estimate for GM’s 2025 earnings has moved north 0.5% over the past 7 days and suggests year-over-year growth of 8.68%. It is currently pegged at $11.52 per share.
The Zacks Consensus Estimate for ZAPP’s fiscal 2025 loss is currently pegged at 84 cents per share, and narrowed by half over the past 30 days. The figure suggests growth of 67.2% on a year-over-year basis.
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