Automaker Volkswagen AG said Friday its third-quarter profit soared higher on improved sales in Asia, Europe and South America, along with lower costs for building cars.

The Wolfsburg, Germany-based company, Europe's biggest car maker, earned 947 million euros (US$1.35 billion) in the July-September period compared with a profit of just 23 million euros a year earlier, beating the 865 million euros ($1.23 billion) that analysts in a poll had predicted.

Last year's earnings report included heavy costs from job cuts and streamlining production.

Sales rose nearly four per cent to 26.1 billion euros ($37.35 billion) from 25.1 billion euros a year ago, slightly below the 26.8 billion euros ($38.35 billion) that analysts had predicted.

``We have become better, more productive and more profitable,'' said chief financial officer Hans Dieter Poetsch. ``All brands contributed to this success.''

The company's net profit in the first nine months of the year more than doubled on improves sales in Asia and Europe along with lower costs for making cars.

The company earned 2.9 billion euros ($4.15 billion) from January-September, compared with 1.2 billion euros a year earlier, beating the 2.8 billion euros ($4.01 billion) that analysts in a poll had predicted.

Sales in the nine-month period rose 5.1 per cent to 80.9 billion euros ($115.76 billion) from 77 billion euros a year earlier. Volkswagen said it sold 4.6 million cars worldwide in the period, up 8.2 per cent from the same time in 2006.

``Customers find our cars compelling,'' Poetsch said. ``And the response to the new models we have presented has been consistently positive.''

He said the company, whose brands include Audi, Lamborghini, Bentley, Seat and Skoda, is on track to sell 6 million cars by the end of the year.

He also said the company expected to reach an operating profit of ``at least 5.1 billion euros ($7.3 billion),'' a target that had been set for 2008.

Shares of Volkswagen were up nearly half a per cent to 175.29 euros ($250.82) in Frankfurt trading.

Volkswagen did not comment on Porsche, which currently owns 31 per cent of Volkswagen AG, but only had a 20-per cent voting right due to a German law protecting VW.

But that is now going to change, after the European Court of Justice ruled Tuesday that Germany's so-called ``VW law,'' had illegally shield Volkswagen from any takeovers.

That ruling, in effect, has put Porsche in the fast lane to acquiring more shares of Volkswagen with the likely aim of taking it over.