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Conti Cuts Outlook Again as Sales Soften
Continental AG’s shares plunged 14% to a nine-year intraday low today as the supplier lowered its 2018 outlook for the second time.
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Continental AG’s shares plunged 14% to a nine-year intraday low today as the supplier lowered its 2018 outlook for the second time.
Conti cites a softening of both original equipment and aftermarket sales in China and Europe, coupled with more spending on warranty claims and technologies related to powertrain electrification.
The company issued its first outlook warning in April. This time it lowered its full-year sales projection by €1 billion to €45 billion ($52 billion). The reduction will be split equally by automotive and tire operations.
Conti now predicts an adjusted pretax earnings margin for the year of more than 9% rather than more than 10%. It also expects free cash flow of €1.6 billion, down from €2 billion. The company vows further cost-cutting, mainly in the current quarter.
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