HANOVER, Germany—Continental A.G. reported a slight drop in profitability at its Rubber Group for the third quarter, while also issuing a downbeat forecast for future growth prospects in the automotive industry.
Continental's financial update was accompanied by news that its executive board has decided to fully spin off its powertrain business Vitesco Technologies with subsequent listing. Due in part to market uncertainty, the company no longer will pursue a potential partial IPO of its powertrain operations, which it originally had considered.
Third quarter sales in the rubber unit, comprising Continental's tires and ContiTech businesses, were about $5.1 billion compared to $4.7 billion in the same period a year ago. Adjusted EBIT margin for the Rubber Group was about 12.3 percent, compared to the prior-year 12.5 percent, the Hanover-based group's preliminary figures issued Oct 22 show.
For the Continental group as a whole, consolidated sales in the third quarter came in at about $12.4 billion and the adjusted EBIT margin was about 5.6 percent, compared to $12 billion and 7.8 percent in the third quarter of 2018.
"Considering the unresolved trade disputes, the unclear situation regarding Brexit, and declining markets, we did reasonably well in the third quarter from an operational standpoint," Continental's CFO Wolfgang Schaefer, Continental's chief fiscal officer, said in a statement.