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 €2.31 billion ($2.57 billion) in the three months to end March from €2.89 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 €2.45 billion.

Revenue fell 3.4% to €50.96 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 Mü ller.

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

Volkswagen said operating profit, which doesn't include earnings from its joint ventures in China, rose 3.4% to €3.4 billion, boosted by a windfall of €309 million, largely from foreign exchange adjustments to the €16.2 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 €1.2 billion in pretax earnings, down from €1.6 billion 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 05:15 ET (09:15 GMT)