HANOVER, Germany (Aug. 12, 2004) — Continental A.G. anticipates 2004 operating earnings and sales will exceed the 2003 fiscal performance, despite having to take up to $144 million in charges against earnings to cover the costs of phasing out tire production at its Mayfield, Ky., plant.
For the period ended June 30, Continental's operating earnings climbed 21 percent to $594.4 million on 9-percent better sales of $6.93 billion, pushing the earnings/sales ratio up nearly a point to 7.9 percent.
Sales of passenger and light truck tires grew 8.3 percent during the six-month period to $2.36 billion despite declining sales in North America. Globally, original equipment sales were up 14 percent, Conti said.
Despite a $121 million charge against earnings taken to cover the phase-out of production at Mayfield, the passenger/light truck tire division reported a slight gain in operating earnings, up 1.2 percent to $148.1 million.
The commercial vehicle division saw operating earnings rise 29.6 percent to $53.1 million while organic sales—i.e., excluding exchange rate effects of the consolidation of the Sime Darby tire assets acquired in Malaysia—rose 10 percent. Overall sales were $876 million, with growth coming primarily from Europe; OE shipments in North America were up 2 percent but the company said replacement market sales were down.