Renowned European car parts and tyre manufacturer, Continental AG (OTCBB: CTTAY, or CTTAY.ob) saw its shares closing Thursday’s regular session at 12.95 percent in the positive supported by the firm’s third quarter adjusted EBIT that turned a corner, somehow overshadowing a prominent fourth consecutive quarterly loss. While the red ink during the July – September period was worsened by traces of one-time charges at its three auto units, it is also attributable to the depleted demand of the company’s supplies as the global carmakers continue to keep their production levels less than normal in response to the worst crisis to hit the industry in a long time.In the period under scrutiny the Hanover-based company swung to a net loss of $1.5 billion ($9 per share) on sales of $7.9 billion. The results compares with a net profit of $3.5 million in respect to the same quarter of 2008. Concurrently, this year’s revenue figure translates to a fall off of 9.4 percent from the matching three months of the previous year. Meanwhile, out of the impairment charges that weighed down on the parts supplier’s financial results, $91 million is related to its interior division, $544.5 to its chassis and safety concern and $663.7 to its powertrain unit.
Following the cost savings of about $5.9 billion for the year to date, Continental said it achieved adjusted EBIT of $612.6 million over the quarter to September, 29 percent to the north of $473 million booked in the third quarter of 2008. Adjusted EBIT margin was reported at a quarterly increase of 7.8 percent, over last year’s 5.5 percent.
“The third quarter bears witness to a sustained major improvement in our operations”, declared Elmar Degenhart, Continental AG’s board chairman. “The progress made is the result of successful restructuring and a slight recovery in the markets. At the same time, with wide-ranging one-off effects we have tackled weighty risks to our bottom line”.
In forward looking, Continental is reportedly weighing the option of selling stock to raise money to reduce its debt of around $14 billion as of September 30. This stock sale is said to have been already permitted by the firm’s supervisory board, overruling the objections of Continental’s major shareholder, Schaeffler Group.
Thursday’s normal trading hours came to a close with CTTAY stock bidding $58, up from $51.35 of the prior day. The shares are up approximately 30 percent this year, but investors are advised to wait for the finer details of the firm’s restructuring progress. At the time of filing the third quarter financial results, Continental and Schaeffler which controls 90 percent of its interest had a debt of $29.6 billion between them.
Reference:
http://www.conti-online.com/generator/www/start/com/en/index_en.html
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