Following a dismal 2015, Volkswagen reported Tuesday morning that the company posted an adjusted operating profit of €3.4 billion on global sales of €51 billion in the first quarter of 2016. Compared with the first quarter of last year, sales were down 3.4% and adjusted operating profits were up 3.4%. Pretax profits fell 19.3% year over year.

The company reiterated that its 2016 forecast for a revenue decline of up to 5% compared with 2015 and operating profit in a range of 5% to 6%. The company expects “a marked decrease” in sales of its passenger cars, with an operating return on sales in a range of 5.5% to 6.5%. Commercial vehicle sales are expected to be flat with last year, and VW expects an operating return on sales of 2% to 4% in the division.

Operating profit in the VW passenger car business fell 86%, from €514 million in the first quarter of 2015 to €73 million this year. Operating profit in the Audi group fell from €1.42 billion to €1.3 billion, and in the Porsche group, operating profit rose from €765 million to €895 million.

VW’s joint ventures in China contributed €1.2 billion to the company’s operating profit in the quarter, down year over year from €1.6 billion in the first quarter of 2015. VW accounts for its business in China using the equity method.

Volume sales totaled 2.58 million units in the quarter, down 1.2% from 2.6 million units in the same period last year. Production fell from 2.72 million units to 2.56 million.

CEO Matthias Müller said:

2016 will be a transitional year for Volkswagen that will see us fundamentally realign the Group. Nevertheless, we remain confident that our operating business will again record solid growth this year. The Group’s robust financial strength and earnings power are key to our ability to take the necessary decisions calmly and diligently, and to resolve the strategic policies that will shape our future with the necessary determination.

Müller also referred to the diesel emissions cheating scandal that has rocked the company for over a year:

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. In the first quarter, we once again managed to limit the economic effects of the diesel issue and achieve respectable results under difficult conditions.

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Volkswagen set aside €16.2 billion to pay fines and fees, and to fix the 11 million diesel cars worldwide that are equipped with the manipulated emissions-control software. VW has yet to agree to a settlement with U.S. regulators and that is due by the end of June.

VW’s shares traded down more than 3% on the XETRA Tuesday morning, at €133.40 in a 52-week range of €86.36 to €228.05.

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