- Tiremaker reduces global car-production forecast to 1%
- Raw-material cost reductions to help earnings by EU250 million
Continental AG fell the most in eight weeks after the German car-parts maker stuck to its 2015 revenue forecast as slowing economic growth holds back gains in global vehicle markets.
Continental dropped as much as 4.8 percent, the steepest intraday decline since Sept. 24, and was trading down 4.1 percent at 214.85 euros as of 9:54 a.m. in Frankfurt. The Hanover-based manufacturer, which raised its sales forecast three times this year, said it still expects revenue in 2015 to exceed 39 billion euros ($42 billion). That compares with analyst estimates of 39.1 billion euros. Worldwide car and light commercial-vehicle production will probably increase 1 percent, less than an earlier prediction of 2 percent growth, Continental said in its quarterly earnings report.
The company, Europe’s second-biggest car-parts manufacturer and its No. 2 tiremaker, is maintaining the sales forecast “despite the substantial decrease in production volumes in China in the third quarter” as well as an “intensified slowdown” in other manufacturing industries, Continental said.
Third-quarter earnings before interest and taxes, adjusted for one-time gains or costs and takeover effects, jumped 11 percent from a year earlier to 1.08 billion euros, or 11.6 percent of sales. The full-year margin will be higher than 11 percent of revenue rather than an earlier forecast amounting to about that figure, Continental said.
Continental, Europe’s second-biggest car-parts manufacturer and the region’s No. 2 tire producer, is benefiting from commodity prices that are at a 16-year low, including a six-year low for rubber. The German company raised its forecast on Monday for positive effects from raw-material cost reductions by 25 percent to 250 million euros.