HANNOVER, Germany (July 31, 2001)—Continental Tire North America Inc. suffered an operating loss of $47.7 million in the first half of 2001, dragging Continental A.G.'s first-half operating profit down 19.1 percent to $194.5 million. Worldwide sales grew 12 percent, to $4.95 billion, dropping the earnings ratio to 3.9 percent.
Continental blamed Continental Tire North America's loss on weakening demand for passenger and commercial tires in both original equipment and replacement markets, continuing pressure on prices, high energy costs and the cost of modifying its plants. Continental's sales in North America fell 6 percent in dollar terms, to $764 million. A year ago, Conti Tire North America reported operating earnings of $18 million.
Despite the loss and drop in sales, Conti said it improved its market position for both passenger and commercial tires, but it did not elaborate.
Among Conti's other business units, the firm's commercial tire business in Europe suffered a loss , whereas the passenger tire and automotive systems units boosted earnings measurably. The ContiTech engineered rubber products unit, which is being divested, reported a slight dip in earnings.
For full-year 2001, Continental anticipates the continuing improvement of the passenger tire business in Europe will help the company offset the drop in earnings related to tires in North America, and result in an increase in overall operating earnings.