HANOVER, Germany (April 29, 2008) — Despite “unsatisfactory trends” in global tire markets, Continental A.G. is on course after the first quarter to achieve its financial targets for the year, according to Manfred Wennemer, Continental Executive Board chairman.
For the first quarter, both the Passenger/Light Truck Tires and Commercial Vehicle Tires units suffered declines in pre-tax operating earnings on the negative effects of higher raw material prices.
The PLT unit posted 4.8-percent higher sales of $1.91 billion on higher sales volumes in the Americas, while the CV business reported 4.7-percent lower sales of $518.6 million on lower replacement sales both in Europe and the Americas.
The PLT unit's operating income slipped 9.5 percent to $224.6 million, or 11.8 percent of sales. The CV unit's operating earnings plunged 56.6 percent to $19.3 million, or 3.7 percent of sales.
Wennemer noted that a seasonal increase in business, especially in the Americas, through the first three weeks of April helped the PLT unit nearly offset the first-quarter earnings decline.
Conti said it expects pro-forma operating income for fiscal 2008 to exceed the 9.3-percent ratio of sales recorded last year. Conti said it hopes to offset the impact of rising raw materials costs with a mix of price increases, product mix improvements and increased efficiency.
As a corporation, Conti posted pre-tax operating income of $721.5 million on sales of $10.5 billion.