Volkswagen returns to profitability despite emissions scandal

Volkswagen Group reported Tuesday that it returned to profitability in the first quarter following a stunning dip into red ink last year due to the company's emissions scandal.

The German automaker reported a net profit of $2.6 billion in the first quarter, down 20.1% from a year earlier. Sales revenue fell 3.4% to $56.8 billion.

Despite the declines, the earnings report illustrated the company's financial resiliency in the midst of a global firestorm over revelations that its engineers rigged 11 million diesel cars with software to cheat emissions regulations.

The company had posted a loss of $1.8 billion in 2015 after recording a one-time charge of more than $18 billion to pay for the eventual costs of the diesel scandal.

Restoring profitability so quickly underscores Volkswagen's financial viability. In the first quarter of 2016 after special items, Volkswagen reported a 3.4% year-over-year increase in operating profit  to $3.8 billion despite a 1.1% decrease in global vehicle sales to 2.6 million.

“In light of the wide range of challenges we are currently facing, we are satisfied overall with the start we have made to what will undoubtedly be a demanding fiscal year 2016," Volkswagen CEO Matthias Mueller said in a statement.

"In the first quarter, we once again managed to limit the economic effects of the diesel issue and achieve respectable results under difficult conditions. This shows that, with its portfolio of strong brands and its good position in many global automotive markets, the Volkswagen Group sits on very robust foundations."

Volkswagen reiterated its previous forecast that 2016 sales will fall up to 5% — partly due to lost sales expected because of the emissions issue.

Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.