HANNOVER, Germany (July 31, 2003) – Continental A.G.'s first half operating income jumped 14.9 percent, prompting management to raise the full-year earnings outlook to $775 million and the debt gearing ratio to below 100 percent.
Conti achieved improved earnings despite difficult conditions in the global automotive business, which accounts for about 60 percent of the firm's annual sales. Operating profits rose to $443 million while sales revenue was down slightly to $6.27 billion; adjusted for currency fluctuations during the period, sales were up about 6 percent, Conti said. Net income rose 19.7 percent to $216.7 million.
Additionally, the firm said its passenger tire business unit increased operating earnings by nearly a third, to $132 million, despite continued losses in North America. Sales edged up slightly to $2.03 billion, improving the operating margin 1.5 points to 6.5 percent.
Commercial vehicle tire sale sales fell 9.1 percent, to $644 million, but the decline was attributed largely to a change in the scope of consolidation and currency exchange fluctuations. Operating earnings fell 36.5 percent, to $36.7 million, due in large part to higher raw materials costs and additional social welfare expense in the U.S.