Continental shares plunge on car-parts maker profit alert
GERMAN industrial giant Continental shocked investors for the second time this year as disappointing sales in China and Europe forced the carparts maker to cut its revenue forecast and spending on new technology weighed on profitability. The shares plunged the most since 2009.
The world’s second-biggest automotive supplier expects revenue of €46bn for the year, excluding currency effects. It is €1bn lower than a previous target, Continental said on Wednesday. It also reduced its forecast for operating return on sales to more than 9pc, down from a 10pc target.
Continental’s second guid- ance cut this year highlights the pressures on automotive companies whose traditional business model is in flux. The manufacturer, which last month announced sweeping changes to keep pace with the industry’s transformation to electric and self-driving cars, said the cost of developing new technology for customers weighed on its business.
Shares in Continental fell 14pc to €160.20 each by 1:20pm in Frankfurt. A profit warning so soon after an earlier forecast cut in April was a shock, Tim Schuldt, an analyst at Equinet, said by phone. (Bloomberg)
A tire at the Continental AG plant in Timisoara, Romania