HANOVER, Germany (May 9, 2011)—Continental A.G. achieved record sales and profits in the quarter ended March 31, as both the automotive and rubber groups contributed with double-digit revenue and earnings improvements, including 28-percent growth by the tire divisions.
Conti reported net income of $502.7 million on sales of $10 billion, gains of 61.7 and 23 percent, respectively. Pre-tax operating income jumped 28 percent to $866.1 million, or 14 percent of sales, Conti said.
About half of the net income increase was attributable to a one-time tax benefit, Conti said.
Conti's passenger/light truck Tire Business Staff Reported 15.4-percent higher pre-tax operating income of $428.8 million on 23.2-percent better sales of $2.16 billion. Higher selling prices accounted for more than half of the revenue improvement, as unit sales volume advanced 10 percent.
The division's strongest growth was in OE business worldwide and the North American replacement market.
The commercial vehicle tires unit's pre-tax earnings shot up nearly 65 percent to $58.2 million on 49.9-percent higher sales of $574.9 million. OE demand globally and replacement growth in North America paced the business's results.
Despite the fast start to the year, Conti management is sticking with its earlier forecast of 10-percent sales growth for the year with an operating margin close to last year's 9.7 percent. Rising raw material prices continue to be a big concern.