HANOVER, Germany — Continental A.G.'s Rubber Group reported slight declines in operating earnings for the three- and six-month periods ended June 30 on flat sales revenue for both periods.
The unit, which includes Continental's Tire and ContiTech divisions, reported pre-tax operating income of $978 million for the quarter and $1.85 billion for the half, drops of 2.2 percent and 7.1 percent, respectively, vs. the 2017 periods.
Continental attributed the drops in earnings to higher-than-expected raw materials costs and foreign-exchange rate losses.
Rubber Group sales revenue was up 0.6 percent in the quarter to $5.19 billion and down 0.2 percent in the half to $10.1 billion.
The performance included a recovery within the Tire Division, which had been impacted by exchange-rate effects in the first three months.
"Our tire business was back up again in the second quarter, maintaining its profitable position on the global market," Conti CEO Elmar Degenhart said.
Tire Division revenue fell 0.5 percent and 2.4 percent for the quarter and half, respectively, to $3.3 billion and $6.4 billion. Conti said consumer unit volumes were off slightly in both the original equipment and replacement businesses, while commercial-vehicle unit sales were off 2 percent.
Adjusted pre-tax operating income for the six months fell 11.8 percent to $1.06 billion, resulting in an operating ratio of 16.3 percent, down two-plus points from the 2017 period.
In April, Continental said it expected exchange rate and inventory-valuation effects to impact earnings by around $175 million in the first half of the year, with its tire business primarily affected.