Continental smashes Q3 forecasts, but cuts sales guidance
By Benjamin Chiou
Date: Monday 11 Nov 2024
(Sharecast News) - Shares in Continental surged in Frankfurt on Monday after the German auto parts and tyres manufacturer beat estimates with third-quarter profits, as investors shrugged off its move to cut sales guidance for the full year.
Despite sales dipping 4% year-on-year in the three months to 30 September to €9.83bn, the company reported a 36% jump in adjusted earnings before interest and tax to €873m, smashing market forecasts by around a tenth.
Group adjusted EBIT margins jumped to 8.9% from 6.3% a year earlier as the automotive division made progress on measures to reduce costs and improve efficiency. The tyres division also performed well on the back of improved demand in Europe, helped by encouraging early sales of winter tyres.
However, the industrial business, ContiTech, was dented by continued weak industrial development in Europe and North America, Continental said.
"Continental does not expect the industrial business to recover in the fourth quarter and is therefore adjusting its sales and earnings outlook for ContiTech. As a result, sales expectations have also been lowered for the Continental Group as a whole," the company said in a statement.
Continental is guiding to full-year sales of €39.5bn to €42.0bn, down €500m from previous guidance of €40.0bn to €42.5bn.
By 1132 CET, the stock was up 7.1% at €60.52.
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