(RTTNews) - German carmaker Volkswagen AG posted weaker second-quarter profits due to reduced production and sales volumes. The firm held steady on its fiscal 2026 margin guidance while lowering its revenue growth forecast. The automotive manufacturer expects stronger margins in the second half of the year.

Net earnings after tax totaled 1.538 billion euros, a 32.9 percent drop from 2.291 billion euros in the prior-year period.

Earnings before tax reached 2.538 billion euros, down 23.4 percent from 3.314 billion euros a year earlier.

Operating profit declined 9.5 percent year-over-year to 3.469 billion euros, and the operating margin fell to 4.2 percent from 4.7 percent previously.

Sales revenue rose 2.0 percent to 82.444 billion euros from 80.806 billion euros. Vehicle deliveries to customers however fell sharply.

Customer deliveries totaled 2.077 million units, an 8.6 percent decline, while vehicle sales reached 2.043 million units, down 9.7 percent. Production volumes dropped 13.4 percent to 2.014 million units from 2.325 million units a year ago.

Looking ahead, the Volkswagen Group kept its operating return on sales target between 4.0 and 5.5 percent for 2026.

The company adjusted its 2026 sales revenue outlook to a range of negative 3 to 0 percent compared with the prior year, down from the earlier projection of 0 to positive 3 percent.

In the Automotive Division, the firm continues to target an investment ratio between 11 and 12 percent in 2026.

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