HAMBURG, Germany (July 30)—While Phoenix A.G.'s first-half sales reached a record $520 million, up 21.3 percent from last year's first six months, earnings before interest and tax rose just 3.8 percent to $17.7 million. Phoenix linked the disappointing earnings figure to restructuring costs, a high dollar exchange rate, increases in raw material prices and difficulties in passing on price hikes. As a result, the company said it now expects end of year operating earnings to be about $45 million, below the 6-percent earnings margin previously targeted. On the plus side, Phoenix expects to benefit from cost efficiencies from its now complete restructuring plan and from its "strong position" in industrial markets. First-half sales at the company's core units—mainly comfort systems, fluid handling and conveyor belt systems—rose 21.5 percent compared with 19.7 percent for other activities.