HANNOVER, Germany (Oct. 29, 2003) — Continental A.G. is raising its earnings forecast for fiscal 2003 based on “gratifying gains in volume” during the third quarter and despite slight declines in vehicle output in North America and Europe, according to Chairman Manfred Wennemer.
Projected operating earnings for 2003 of $872 million would be 7 percent ahead of 2002. Third quarter operating profits were up 11 percent to $304 million, pushing the nine-month earnings up 20.7 percent to $768 million, or 7.8 percent of sales.
At the same time, Hannover-based Conti has reduced its net debt by $916 million, dropping its debt gearing ratio (net indebtedness/shareholders' equity) to 93 percent.
Continental Tire North America Inc. suffered a loss in the passenger tire business, and commercial tire earnings were lower despite a slight gain in sales, the company said.
Strong winter tire sales in Europe — up 13 percent over 2002 — helped push up sales and earnings at Conti's global passenger tire business. The division's sales rose 2.1 percent for the nine months to $3.27 billion as it shipped 6 million more tires than the year before, Conti said.
The division's operating profit was up 50.8 percent, to $278 million, despite the loss in North America.
Commercial Vehicle Tires division sales for the nine months fell 8.7 percent to $1.04 billion, but this was largely due to a change in consolidation that shifted about $25 million in sales to the passenger tire division. Operating earnings fell 30 percent to $66 million on the effects of higher raw materials costs and additional social welfare expense in the U.S., the company said.