volkswagen_logo.jpgEurope’s largest automaker, Volkswagen AG, has reported lower than expected profits for the third quarter due to an 81 percent decline in operating profits. VW maintains full-year earnings will drop year over year.

VW reported a drop to $409.7 million in operating profit for the third-quarter. This reported drop puts VW’s earnings far below the expected number released earlier this year by a team of 17 analysts polled by Reuters.

A report which outlined the causes for the drop said, “The group’s sales revenue in 2009 will be lower than in the previous year in particular because of weaker volume sales.” The report went on to list other causes such as refinancing costs and severe losses from Spanish brand Seat and the ultra-luxury brand Bentley.

Overall, net cash flow remained strong for the first three quarters at 5.1 billion euros. Through September net liquidity has been lifted to 13.4 billion euros.