German automotive supplier Continental AG (CTTAY.PK) Friday reported a lower first-quarter profit, as difficult market development in Europe had a negative impact on passenger car production and tire sales volumes. However, the company confirmed its guidance for full-year 2013. The shares are up about 7 percent on Frankfurt's Xetra.
"As anticipated, the first three months of this year were difficult. However, our business has already regained momentum. We're confident that global production of passenger cars will continue to stabilize," said CEO Elmar Degenhanerittrt.
For full-year 2013, the firm still anticipates a rise in sales of around 5 percent to more than 34 billion euros, and an adjusted EBIT margin of over 10 percent.
In the first quarter, net income attributable to shareholders of the parent decreased to 441.2 million euros, from 482.9 million euros in the previous year. On a per share basis, earnings were 2.21 euros, lower than 2.41 euros per share in the year-ago quarter.
Earnings before interest, tax, depreciation and amortization or EBITDA, a key earnings measure, decreased to 1.17 billion euros from 1.20 billion euros a year earlier.
Operating result or EBIT decreased 5 percent year-over-year to 747 million euros. The decline was partly due to persistently high research and development expenses, which climbed to 8.7 percent of sales in the Automotive Group, the company said.
Quarterly sales declined 3.4 percent to 8.03 billion euros from 8.32 billion euros in the same quarter last year. The company noted that the prior year had recorded the highest sales in Continental's history, and additionally, the recent first quarter had three fewer working days compared to last year.
Before changes in the scope of consolidation, adjusted sales for the quarter were 7.99 billion euros, down from 8.32 billion euros last year.
Automotive Group generated sales of 4.9 billion euros, with an adjusted margin of 7.2 percent, after recording an 8.1 percent in the previous year.
Continental noted that owing to the first-time adoption of IAS 19, Employee Benefits, as at January 1, 2013, all subsequent figures for the comparative periods have been restated.
On Frankfurt's Xetra, Continental shares are currently trading at 96.37 euros, up 5.91 euros or 6.53 percent, on a volume of 721 thousand shares.
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