Frankfurt: Net profits tumbled in the third quarter at Volkswagen as the world's biggest carmaker booked higher-than-expected charges related to the "dieselgate" emissions cheating scandal.


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VW reported net profit attributable to shareholders down 53.4 percent year-on-year, at 1.06 billion euros (USD 1.23 billion), but lifted its forecast for the full year despite the tumble.


The group had warned last month that it would have to set aside more cash to deal with a recall of around 500,000 diesel cars in the United States rigged to cheat emissions tests.


The provisions turned out 100 million euros higher than the group had forecast, at 2.6 rather than 2.5 billion euros.


The charge brings the total VW has now set aside to handle "dieselgate" - the scandal that saw it admit in 2015 to manipulating millions of cars worldwide to fool regulators - to more than 25 billion euros.


Aside from what the company delicately refers to in financial reports as "the diesel question", VW reported broadly stronger performance between July and September than last year.


Revenues increased 5.8 percent year-on-year, to 55 billion euros, roughly in line with a 6.3-percent increase in unit sales to 2.65 million vehicles.


And operating profit before accounting for the diesel- related charges and other special items was up 15.1 percent, at 4.3 billion euros.


"The third quarter result is impressive and backs up customers' trust in our brands and their products," chief executive Matthias Mueller said in a statement.


VW is the flagship of the group's 12 auto brands, ranging from luxury Audi and Porsche to mass-market Seat and Skoda - some of which were also dragged into the diesel scandal.


Looking ahead to the full year, the group expects "slightly higher" unit sales than in 2016 and revenue "more than 4.0 percent higher", while it increased its forecast for operating profit to "slightly higher" than the 6.0-7.0 percent increase it had targeted until now.


VW shares gained 2.58 percent to trade at 149.25 euros by 0730 GMT, outperforming the DAX index of blue-chip German shares, up 0.7 percent.