Continental defies analysts’ estimates to post $295M 4Q profit
Continental AG, Europe’s second-largest tiremaker, reported fourth-quarter profit and revenue that beat analysts’ estimates and predicted rising sales in Asia will offset additional costs from rubber’s surge. Net income was 213 million euros ($295 million), compared with a loss of 154 million euros a year earlier. Profit topped the 163 million-euro average estimate of seven analysts compiled by Bloomberg. Sales rose 21 percent to 6.9 billion euros Continental said Thursday.
Continental forecast revenue may jump about 10 percent this year, with growth in emerging markets in Asia helping to offset as much as 700 million euros in additional costs because of high rubber prices. Benchmark rubber futures have jumped more than fourfold since reaching a six-year low in December 2008, prompting tiremakers from Bridgestone and Michelin & Cie. to increase prices.
Continental, which is also Europe’s second-biggest car-component maker, returned to an annual profit last year as China’s car market jumped 32 percent and U.S. auto sales recovered. The company aims to cut debt to less than 7 billion euros this year from 7.3 billion euros at the end of 2010, Degenhart said.
This year, earnings before interest, taxes and one-time items as a percentage of sales will remain steady at 2010’s 9.7 percent while sales will probably grow about 10 percent to exceed 28.5 billion euros, Continental said.
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