HANNOVER, Germany (May 4, 2010)—Continental A.G.'s Rubber Group nearly tripled its operating income in the quarter ended March 31 on 25.1-percent higher sales, helping the parent company post solid earnings and increase sales 39.4 percent.
The Rubber Group—consisting of the consumer and commercial tire businesses and ContiTech industrial rubber products unit—posted pre-tax operating income of $443.2 million on sales of $3.09 billion, for an earning/sales ratio of 14.5 percent.
Conti cautioned, however, that the Rubber Group will experience nearly $350 million in additional costs in the second quarter related to rising raw materials costs, especially for natural rubber.
The passenger/light truck tire division reported a 133.4-percent jump in pre-tax operating income to $297.4 million while sales surged 28.7 percent to $1.78 billion on strong replacement sales in the Americas and a rebound in OE sales worldwide, Conti said.
The commercial vehicle tires unit returned to the black on an operating basis, reporting $8.2 million in pre-tax earnings on 18-percent better sales of $387.8 million. Replacement demand surged between 30 and 50 percent in all of the firm's key markets, Conti said.
Overall, Conti reported pre-tax operating income of $684.2 million on sales of $8.31 billion. Net income of $315.4 million contrasted with a loss of more than $350 million a year ago.
Continental Executive Board Chairman Elmar Degenhart said Conti can “explicitly confirm a significant increase of adjusted EBIT in 2010,” while expecting sales growth of 5 to 10 percent for the year.
“After the first half-year,” he said, “we will then substantiate our full-year estimates on the basis of the figures available at that time.”