HANOVER, Germany — Continental A.G. suffered a 17.1-percent drop in operating income in the quarter ended March 31 on 0.3-percent lower sales revenue.
Despite the earnings decline, Conti Chairman Elmar Degenhart classified the first quarter as a "solid performance" in light of a "weak" market environment.
"Global car production was down substantially at the beginning of the year, as expected," Mr. Degenhart told those attending the firm's annual shareholders' meeting in Hanover. "That is why our solid results are all the more gratifying, thanks to our strong market position on the mobility markets worldwide. Our increased cost discipline also contributed to this achievement."
Conti's operating income fell to $1 billion on sales of $12.6 billion. The operating ratio fell one-and-a-half points to 8.1 percent.
Conti management continues to expect a market upturn in the second half of the year and thus is maintaining its guidance on the full fiscal year that was issued in early January — sales growth of 1 to 5 percent and operating earnings on par with fiscal 2018.
Conti did not elaborate at this time on the performance of its various business units; it plans to release its first-quarter results May 9.
Mr. Degenhart disclosed in his remarks that the firm's drivetrain business that is being spun off will be called Vitesco Technologies. Conti continues to prepare for a partial IPO of the business, which likely will take place in 2020, pending the completion of technical and regulatory requirements.
Longer term, Mr. Degenhart told shareholders that Conti is focused on preparing itself to be an active participant in an automotive industry that is "undergoing the most profound transformation since its inception.
"We are in a marathon that is already well under way, and Continental is one of the front runners."
Continental expects to be in a position to help shape the mobility ecosystem in three fields of technology in the next 20 years: alternative drive systems; autonomous driving; and interconnectivity, including the cloud along with data management.