HANOVER, Germany — Continental A.G. is forecasting "marginal" sales growth for its rubber-based businesses in the second quarter, "in line with market expectations."
Tires division sales are set to come in at about $3.9 billion for the three months ended June 30, up roughly 3% from a year ago, Continental said in a preliminary results statement.
Sector adjusted EBIT margin is expected to reach 13.7%, down slightly from a year ago but up 0.4 percentage points from the market expectation published earlier.
In the first quarter, Conti's tire business suffered a 17% drop in pre-tax operating earnings on 5.1% higher sales revenue of $3.75 billion.
Conti attributed the earnings drop in part on higher labor, logistics and energy costs as well as a difference in inventory valuations between the 2023 and 2022 periods.
The tire business revenue was up despite 8.6% lower unit volume sales, Conti said. As a result, the business unit's operating ratio fell three and a half points to 13.5%.
Conti attributed the revenue increase to an improved price/mix component, with mix playing a significant role.
Group-wide, Continental expects consolidated second quarter sales to come in at $11.6 billion, in line with market expectations and nearly 11% higher than a year ago.