Automotive industry Automotive supplier Continental earns significantly more

For the German automotive supplier and tire manufacturer Continental, business in the second quarter was significantly better than a year earlier.

At 305 million euros, the bottom line was almost half more profitable, as the company announced in Hanover. However, sales fell by a good 4 percent to 10.0 billion euros.

The cost-cutting program with job cuts and price renegotiations with car manufacturers reportedly had an effect, which should benefit the company even more in the coming quarters. The operating result rose by almost 41 percent year-on-year to 704 million euros, which was better than analysts had expected.

Conti now anticipates lower sales this year than previously in a weaker environment. As the company is assuming lower car production by manufacturers, particularly in Europe, and the market development in the North American tire replacement business is also weaker, Group CEO Nikolai Setzer has trimmed the sales forecast to between 40 and 42.5 billion euros. Previously, 41 to 44 billion euros had been targeted.

Conti is sticking to its previous target range for the operating profit margin before interest, taxes and special items. However, the outlook for operating profit in the automotive supply segment alone has deteriorated somewhat. On Monday, the Group announced its intention to spin off its automotive supply business on the stock market.