Significant higher Conti profits expected in Q3, say analysts

On 31 October Continental AG will host a conference call and tyre division investor day to coincide with the release of the company’s third quarter results. Analysts at Deutsche Bank anticipate that Continental will report revenues of 8.1 billion euros for the quarter, a five per cent year-on-year increase. Other expected results include an adjusted EBIT of 844 million euros – the analysts note that this projected 13 per cent year-on-year growth is driven by Conti’s tyre business – and a net profit of 401 million euros, up 90 per cent on a year earlier.

Revenues for Continental’s Rubber Group’s – Contitech and the tyre division – are estimated to be 3.34 billion, up seven per cent year-on-year, while EBIT is expected to increase 26 per cent to 500 million euros. The tyre division should be the main earnings driver, as was the case in previous quarters; the analysts opine that a positive price and mix and more favourable raw material prices will help to this end, and the adjusted EBIT for tyre operations should thus increase by 40 per cent, growth comparable with the previous two quarters.

“The group has so far done better than expected in the current crisis and should benefit from superior growth in Automotive (the Automotive Systems division) and from weaker raw materials in tyres,” commented the Deutsche Bank analysts.