Continental has posted weaker than expected third-quarter earnings after a feeble start to the winter tyre season. The CFO of the German auto parts and tyre maker told Reuters China was a factor. Hayley Platt reports.
Strong demand from the US and Europe helped drive pre tax profits at Continental 11 percent higher to 1.08 billion euros. It was a slightly above its original forecast but still disappointed analysts - pushing shares down almost 5 percent. The tyre and auto parts maker has seen a feeble start to the winter tyre season And CFO Wolfgang Schaefer told Reuters, China remains a challenge with production there down 5 percent. (SOUNDBITE) (ENGLISH) WOLFGANG SCHAEFER, CONTINENTAL CFO, SAYING: "Luckily in the fourth quarter starting in October and now in November as well car production is up and we expect for the fourth quarter 3-4 percent in growth. Overall never-the-less we see China only growing 2-3 percent this year." The German giant is sticking to it sales target of more than 39 billion euros ($42 billion) this year up from 34.5 billion a year ago. It's banking on continued growth in North America and Europe, where it makes more than half its sales. (SOUNDBITE) (ENGLISH) WOLFGANG SCHAEFER, CONTINENTAL CFO, SAYING: "We think Europe has a good chance to further grow next year. We expect the US to be more stable on this 17.5 million cars produced which we are going to see this year. Brazil and Russia will stabilise on the very low levels which are seeing at the moment." Earlier this year Continental bought U.S. rubber company Veyance Technologies for 1.4 billion euros. It's an attempt to diversify away from cars and strengthen its presence in America, which it says is still under represented.