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Tire maker Continental AG says 1Q profit up 22 percent on rising sales

Tire maker Continental AG says 1Q profit up 22 percent on rising sales

Tire maker and automotive systems supplier Continental AG said Wednesday that its first-quarter profit rose 22 percent on rising demand for upscale auto tires and automotive electronics.
The company, which also markets its tires under the Uniroyal brand in Europe and the General brand elsewhere, earned euro271 million (US$368.7 million) in the first three months of 2007, compared with euro222 million a year earlier. That beat the euro233 million (US$317 million) analysts polled by Dow Jones Newswires had predicted.
Sales rose nearly 10 percent to euro3.96 billion (US$5.39 billion) from euro3.61 billion a year earlier as demand for the company's tires in Europe and Asia picked up and on improving sales of its electronic accessories used by automakers. Hanover-based Continental is the world's fourth-biggest maker of tires by sales.
"We've had a very good first quarter, which was characterized by an overall gratifying development in car production, especially in Europe and Asia," said Chief Executive Manfred Wennemer. "Other positive factors were the increases in replacement sales for passenger and light truck tires in Europe and North America, where we upped earnings significantly."
Looking ahead, Wennemer said the company expects its full-year sales to increase by 5 percent from 2006, along with profits.
"Backed by these positive results for the first three months, we're highly confident that we will again improve sales and operating result in absolute terms and thus dependably achieve our goals for the year," he said. "We still consider, however, raw material prices to be a major uncertainty factor and are currently expecting them to stabilize at a high level on the whole."
Continental's closely watched earnings before interest and taxes, or EBIT, rose 24 percent to euro437 million (US$594.54 million) from euro352 million last year.
Shares of Continental rose more than 3 percent to a new high of euro105.76 (US$143.89) after the results were released, but fell back slightly to euro105.47 (US$143.31) in Frankfurt trading.
Continental shares have risen some 8 percent in the past year on rumors that it is being lined up as a takeover target by private equity funds. The company has not commented on the increase nor has it said if it is any talks with any groups about being sold.
Continental is one of the biggest suppliers of braking systems to the automotive industry in Europe and North America. Its U.S. operations include plants in Georgia, Illinois, Michigan, Tennessee and Texas.
While its rivals have suffered from high production costs and slowdowns, Continental has avoided a similar fate by shifting much of its production to lower-cost countries in South American, Asia and Eastern Europe.
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On the Net:
http://www.conti-online.com


Updated : 2021-05-08 10:24 GMT+08:00