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Auto supplier Continental suffers red numbers in the first quarter
"Automotive supplier Continental is in the red again in the first quarter - shares are falling. Find out more about the company's challenges in the automotive supply industry. #Continental #Autoindustry"
Auto supplier Continental suffers red numbers in the first quarter
The car supplier and tire manufacturer Continental is once again facing red figures in car supply, as shown by preliminary quarterly figures. Despite the planned better business performance in this area for the current year, the start to the year turned out to be disappointing. Analysts were surprised by the losses, which were higher than expected. Particularly weak sales volumes, pending price negotiations and delays in product launches contributed to the negative results.
Bank JPMorgan described the start to the year as extremely weak and stressed the need for price increases and cost savings to meet forecasts for the fiscal year. The pressure on management is increasing to ensure the desired profitability in the car business. At the same time, austerity measures and job cuts are underway to reduce costs by 2025.
Other companies in the industry are also facing similar challenges. Bosch and ZF also announced job cuts to cope with economic pressures. Despite negative developments in the automotive supply sector, Continental was able to record a positive operating margin thanks to the tire division. However, the overall results of the first quarter raise doubts about whether the target will be achieved.
In view of the weak figures, Continental's share price is in danger of falling back to its November level. Analysts are critical of the maintained annual targets and expect a significant improvement in margins in the coming quarters. Investors are demanding clear evidence of the causes of weakness and will closely monitor business developments in the second half of the year. The detailed quarterly figures are scheduled to be published on May 8th.