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German car parts giant Continental shares plummet

2018-08-22 13:06

Shares in German car parts giant Continental dropped more than 13% Wednesday after the group said annual profits would be slashed by falling sales and higher costs.

Stock in the Hanover-based firm plunged 13.2% to trade at €160.85 ($186.46) by noon in Frankfurt.

"Lowered sales expectations, cost increases and warranty claims are decreasing the adjusted operating result in the third quarter," Continental said in a statement.

Daimler, BMW and Volkswagen also lost ground on DAX 

Rather than initial hopes for €47-billion of sales, the group now expects to bring in around €46-billion over 2018, pointing to exchange rate effects weighing on the forecast to the tune of €1-billion.

Revenue of €46-billion would still be an improvement of 4.5% over last year's turnover.

Meanwhile, Continental expects adjusted operating profits as measured by EBIT to amount to 9% of sales, rather than "more than 10%" as previously predicted.

Other household names of Germany's vast car industry, including Daimler, BMW and Volkswagen, also lost some ground compared with a largely flat DAX index of blue-chip shares.

But with Mercedes-Benz parent Daimler down 1.8%, BMW shedding 1.2% and VW 1.1%, their losses were far less drastic than Continental's. 

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