Continental Profit Hurt by Rising Costs

By Ulrike Dauer

FRANKFURT--Continental AG (CON.XE) on Thursday said net profit fell 41% in the third quarter, mainly on higher costs, but said it was on track for full-year earnings targets.

Net profit in the quarter ended Sept. 30 fell to 378.5 million euros ($414.1 million) from EUR635.7 million in the year-earlier quarter, shy of EUR399 million forecast in a Dow Jones Newswires poll of five analysts.

Sales rose 3.8% to EUR9.98 billion, above the forecast EUR9.90 billion.

The German auto parts maker said it was on track for its 2016 targets of an adjusted operating profit margin of above 10.5% and sales of around EUR41 billion.

Continental had lowered the profit margin guidance in mid-October, from 11%, because it identified new factors that will lower 2016 operating profit of its Automotive business by some EUR480 million this year. Of this, EUR450 million was booked in the third quarter. The expected hits are a mix of warranty expenses, potential antitrust fines, negative effects from three earthquakes in Japan and higher costs for research & development, Continental has said.

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(END) Dow Jones Newswires

November 10, 2016 01:50 ET (06:50 GMT)

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