Continental confirms outlook despite rough Q1

Continental, the German maker of automotive parts and tyres, said Friday it would stick to its upbeat annual forecast despite a tough first quarter in a challenging western European market. Net profit in the first three months of the year slipped nearly nine percent to 441 million euros ($576 million), a less steep decline than forecast by analysts polled by Dow Jones Newswires. They had predicted a 24-percent drop to 367 million euros. Sales during the same period declined more than three percent to eight billion euros, dragged down by the weakness of the European automobile market. Earnings before interest and taxes (EBIT) fell more than five percent year-on-year to 747 million euros, slashed by investment in research and development, the company based in the northern city of Hanover said. Continental nevertheless offered a sunny outlook for the year as the market gradually recovers. "Our business has already regained momentum. We're confident that global production of passenger cars will continue to stabilise," chief executive Elmar Degenhart said in a statement. "For the current year, we therefore still anticipate a rise in sales of around five percent to more than 34 billion euros and an adjusted EBIT margin of over 10 percent, particularly since we have already hit these targets in the first quarter despite all the adverse circumstances." Continental shares rose slightly on the news on the Frankfurt stock exchange.