Continental lowers tires outlook on declining Europe, North America business By Reuters

0
259
Continental lowers tires outlook on declining Europe, North America business By Reuters


© Reuters. FILE PHOTO: Logo of German tyre company Continental is pictured before the annual news conference in Hanover, Germany, March 9, 2021. REUTERS/Fabian Bimmer

BERLIN (Reuters) -Continental lowered its outlook for its tires sector on Wednesday to 14-15 billion euros ($31.82 billion) from 14.5-15.5 billion previously, citing a declining market in the tire-replacement business in Europe and North America.

The supplier said it needed to “make up considerable ground” in its automotive segment which fell short of expectations in the second quarter partly due to currency exchange effects and freight costs.

Higher costs for materials, wages, salaries, energy, and logistics will likely impact earnings for the year by 1.4 billion euros, it said, down from a previous estiamte of 1.7 billion.

Continental confirmed its lower-than-expected adjusted earnings margin 4.8% on sales of 10.4 billion euros, as reported in preliminary results in July.

The automotive segment saw a loss on its earnings margin of -0.6%, below the consensus of 1%, despite meeting expectations for sales at 5.1 billion euros.

The company said it now expects passenger car and light commercial vehicle production to rise 3-5% from a previous forecast of a 2-4% rise, but expects the global tire replacement business to remain unchanged or decline by up to 2%.

Preliminary figures indicated that global passenger car and light commercial vehicle production grew around 16% compared to last year, it added.

($1 = 0.9115 euros)



Source link