- Car supplier Continental earns significantly more
For Continental, business in the second quarter was significantly better than a year ago. The operating result of the automotive supplier and tire manufacturer increased by nearly 41% to 704 million euros, outperforming analysts' expectations. Net profit rose by almost half to 305 million euros, as the company announced in Hannover. However, revenue fell by around 4% to 10.0 billion euros.
The cost-saving program, including job cuts, and price renegotiations with automakers appear to have had an impact, which should further benefit the company in the coming quarters.
However, Continental expects lower revenue this year due to a weaker environment. The company anticipates lower car production in Europe and a weaker market trend in the North American tire replacement business, leading CEO Nikolai Setzer to revise the revenue forecast to 40 to 42.5 billion euros. Previously, the target was set at 41 to 44 billion euros.
Continental maintains its target range for the operating profit margin before interest, taxes, and special items. However, the outlook for the operating profit in the automotive supply business has slightly deteriorated. The company announced on Monday that it plans to spin off its automotive supply business on the stock exchange.
Despite the decrease in revenue, Continental's successful cost-saving measures in manufacturing, such as job cuts and price negotiations, enhanced the company's operating result in the second quarter. Despite these achievements, the company forecasts lower revenue for the year due to various economic factors.
