The European automotive supplier announced it would positively modify its full year profit guidance outlook following second quarter results that came with an earnings jump.
The updated profit guidance comes as the second quarter results exceeded expectations thanks to the faster European auto market turnaround – Continental reported its new threshold for the adjusted profit margin would be of about 11 percent for the year, rising from the previous prediction of 10.5 percent. With revenue rising 18 percent to 10 billion euros, the second quarter adjusted earnings before interest and taxes (EBIT) jumped 25 percent to 1.25 billion euros ($1.37 billion) after posting a result of one billion last year during the same period. The auto parts maker also modified its annual free cash-flow outlook to more than 1.8 billion euros after it forecasted it would each more than 1.5 billion euros. “Despite a slowdown in the growth rate of vehicle production in Asia, we anticipate stable business development in the remaining half of the year at the high level already achieved,” commented chief executive officer Elmar Degenhart in a released statement.
Continental managed to reduce raw-material costs as the global market has seen falling oil prices and dropping commodities expenses. The euro also slid against the dollar and thus lifted the revenue from repatriated earnings. Analysts also observed a careful move from the firm in China, where Continental mitigated the sharp decline in auto sales across the globe’s biggest market by selling directly to local companies rather to foreign automakers operating there.
Via Automotive News Europe