The growth in the auto industry has prompted Continental AG to raise its 2010 forecasts for the second time this year. However, its stock fell as quarterly profit missed estimates.
The full-year revenue of Europe's second-biggest car parts supplier had gone up to over 25 billion euros ($35 billion), a 24% increase from 2009.
Earnings before interest, taxes and one-time items will total 9% of sales. In comparison, its forecast in July had indicated a more than 15% increase in sales this year and an adjusted EBIT margin of 8% to 8.5%.
Earnings at Continental were boosted by car-sales growth in China and other emerging markets. Continental, which is also Europe's second-biggest tiremaker, has sold 3 billion euros of high-yield bonds since mid-2010 to aid in extending a repayment schedule for about 8 billion euros of debt, which originates from the takeover of Siemens AG's VDO auto-parts unit in 2007.
Continental decreased by up to 4.5% to 60.85 euros, the largest intraday drop in a month. On the same day, it fell 3.6% as of 9:39 CET in Frankfurt trading. This reduced the stock's gain this year to 68%. [via autonews - sub. required]