By William Boston 

BERLIN-- Volkswagen AG, struggling to move past its emissions-cheating scandal, swung back to profit in the first quarter after reporting a record loss for the full year 2015, with the absence of new provisions against earnings feeding optimism that the German car maker has digested the bulk of the financial pain from the diesel crisis.

The world's biggest car maker by sales reported a 20% drop in net profit to EUR2.31 billion ($2.57 billion) in the three months to end March from EUR2.89 billion in the same period last year, below a consensus of analyst forecasts compiled by Dow Jones that had forecast a 15% drop in net profit to EUR2.45 billion.

Revenue fell 3.4% to EUR50.96 billion.

"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," said Chief Executive Matthias Müller.

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

Volkswagen said operating profit, which doesn't include earnings from its joint ventures in China, rose 3.4% to EUR3.4 billion euros, boosted by a windfall of EUR309 million euros, largely from foreign exchange adjustments to the EUR16.2 billion that Volkswagen set aside in 2015 to cover the costs of the diesel crisis.

Without the currency gain, Volkswagen's first-quarter operating earnings were roughly at the same level as last year.

The company's two Chinese joint ventures contributed EUR1.2 billion euros in pretax earnings, down from EUR1.6 billion euros in the same quarter last year. The earnings from China are booked as an equity gain and appear in the net profit.

Write to William Boston at william.boston@wsj.com

(END) Dow Jones Newswires

May 31, 2016 03:53 ET (07:53 GMT)