In a surprise move, Volkswagen (NASDAQOTH:VWAGY) said on Friday that it will indefinitely delay the reporting of its fourth-quarter and full-year 2015 earnings because of issues relating to its emissions cheating scandal.
What's happening: VW's statement said that the publication of its full-year financial report for 2015 (and its fourth-quarter results), originally scheduled for March 10, will be delayed to an unspecified future date because of "remaining open questions and the resulting valuation calculations relating to the diesel emissions issue."
VW also said that it is postponing its annual meeting of shareholders, again to an unspecified future date. The annual meeting had been scheduled for April 21.
VW previously said that it would present the results of its internal investigation into the scandal at the annual meeting on April 21. That apparently hasn't changed: VW said on Friday that it still plans to publish the findings in "the second half of April."
What it means: It means that VW's new leadership team is still struggling to come to terms with the cost of the scandal. VW said in its statement on Friday that it expects its operating profit for 2015 to be roughly comparable to its 2014 result, in line with its prior guidance -- before special items.
It's the calculation of those special items, the costs related to the scandal, that may be an issue. VW may be in the process of negotiating a settlement with the U.S. government, and possibly with other parties as well. Such settlements are likely to involve very hefty payments, and perhaps Mueller is waiting in hopes of charging some or all of those sums against VW's 2015 earnings.
Shortly after the U.S. Environmental Protection Agency announced its initial charges against Volkswagen in September, the company said that it would take a charge of 6.5 billion euros ($7.24 billion) against its third-quarter earnings result to cover the costs of repairing the affected vehicles and paying the expected fines.
But as I said at the time, with regulators around the world threatening action and lawsuits mounting, that likely won't be nearly enough to cover all of the costs. It seems likely that CEO Matthias Mueller wants a more precise estimation of the bill for the scandal before reporting VW's 2015 results, and maybe some extra time to negotiate those settlements.
What happens next: Regulators, lawmakers, VW diesel owners, VW dealers, and investors contemplating the company's beaten-up stock have all been waiting since September for VW to explain what happened and to give a realistic estimate of how the scandal will affect its finances.
What happens next is that all of those people will apparently need to wait longer than they thought. It's very possible that VW is working hard behind the scenes to negotiate comprehensive settlements with U.S. and European regulators, and possibly with attorneys representing groups of owners and dealers. If so, if Mueller can manage to settle most of the claims against VW soon, it will be a coup for him.
But if not, the delays will only make things worse in the end. Stay tuned.