Investing.com — Shares in Continental (ETR:) rose Thursday after the German tire maker’s pre-close call during the previous session led analysts to suggest the company’s automotive division had made progress in the second quarter.
In its final announcement ahead of the release of quarterly results on August 7, Continental said the division’s price contribution “should be positive” in the trailing three-month period.
After the comments, analysts at Stifel said they “got the impression that Continental was making tangible progress on price realization in the automotive sector in [the second quarter].”
As a result, they estimate that adjusted quarterly profit before interest and taxes for the auto unit will be 174 million euros, higher than Visible Alpha consensus projections of 16 million euros. For the entire Group, the figure is estimated at EUR 704 million, approximately 26% above expectations.
Meanwhile, Continental said a cost cut in the second half of 2024 will deliver “major savings,” leading to full-year cost savings in the high double to low triple digits.
The Stifel analysts predicted that Continental will “not yet capitulate” to its full-year margin target of 3% to 4% on auto parts due to the savings and improved prices. However, they pointed out that the target remains “difficult to achieve” as the group faces weak demand, especially in Europe.
