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Porsche AG Josh Jackson Jersey , maker of the famous 911 Carerra sports car, said that its first-half profit increased because of a revaluation and hedges on its stake in Volkswagen AG maker of world?s safest vehicles and top-of-the-line Volkswagen antenna. Stuttgart, Germany-based Porsche said in a statement on the DGAP newswire that its net income for six months until January rose to 1.05 billion euros from 169.8 million euros a year earlier. They also added that sales fell by 2.9% or 3.2 billion euros.

According to Chief Executive Officer Wendelin Wiedeking, they are expecting for a lower production costs by 2008. This will provide an operating profit of 5.1 billion euros for Volkswagen and in turn boost Porsche?s earnings from its 27.4 percent stake. Contributions from Volkswagen will offset the stagnating sales for the next two years for Porsche as it develops a four-door car and as demand for the Cayenne sport-utility vehicle falls.

``Financially Jason Kidd Jersey , they were right with their Volkswagen investment,'' said Philippe Barrier, an analyst at Societe Generale in Paris who has a ``buy'' recommendation on Porsche. ``On a fundamental basis you can wonder about it, though for them they say it gives them a stable long-term partnership Grant Hill Jersey , but on a financial basis they've shown they were right.''

Shares of Porsche in Frankfurt fell by 1.8% or 18.41 euros to a three-week low of 991.50 euros. For the past twelve months Porsche?s stocks has gained 58% valuing the automaker at 14.4 billion euros compared to the 29.9 billion euros it has been able to gain from Volkswagen.

Porsche: Biggest Shareholder of Volkswagen

It was Wendelin Wiedeking, Chief Executive Officer of Porsche who bought shares in Volkswagen in September 2005 and from then on Porsche has become one of the biggest shareholders of Volkswagen.

Porsche has earned so much from its investment at Volkswagen a ``substantial figure in the three-digit million-euro range'' as well as a one-time gain of 520 million euros for the revaluation of its stock at the German automaker. Volkswagen?s shares which rose from 0.1% to 84.60 euros have almost risen to 80% for the past twelve months.

In a speech made by Wiedeking at the recent annual shareholders meeting, he criticized those investors who were skeptical of Porsche?s purchase of Volkswagen he goes as far as calling them ``Anglo- Saxon investors'' with ``dishonorable manner''. ``Basically, those accusations claimed that we were destroying the money we had worked for so hard George King Jersey ,'' Wiedeking said. ``The entire project was presented quite literally as an act of madness.''

Profit Beating Estimates

According to the survey conducted by the six analysts from Bloomberg News, the net income gained by Porsche beat their estimated 178 million-euro median and that didn?t include earnings from the Volkswagen holdings. Sales missed the 3.2 billion-euro median estimate. The pretax profit increased to 1.45 billion euros from 277.8 million euros basing on the provisional figures for the fiscal first half.

``In light of the sharp decline in Cayenne sales, it is especially remarkable that they managed to increase operating profit this much,'' said Georg Stuerzer Elie Okobo Jersey , an analyst at HVB Group in Munich. ``The numbers are super, even if you take out the one- time effects.''

The automaker also reported that the first-half deliveries of Porsche cars and SUVs also fell by 5.9% or 39,750 units. The Cayenne sales fell by more than a third to 10,225 vehicles while the 911 model sales gained 16% or 17 Dragan Bender Jersey ,340 units. Deliveries of some of its vehicles particularly the Boxster and Cayman cars also rose to 22% or 12,170 units of vehicles.

Porsche has also experienced revenue decline when it sold the CTS Fahrzeug-Dachsysteme GmbH automotive-roof division in December 2005 to Magna International Inc. ``Analysts didn't adjust their revenue forecast for the disposal of CTS,'' Stuerzer said. ``If you do that, there's hardly any decline in revenue.''