HANOVER (dpa-AFX) - Continental AG (CONG.DE, CON.DE) reported Tuesday higher adjusted EBIT, a key earnings metric, in the second quarter. Further, the company maintained fiscal 2026 outlook for underlying expectations for operational business, excluding the planned sale of ContiTech.
'We significantly increased our profitability and free cash flow. The main drivers for Tires were a higher share of tires measuring 18 inches and above, lower impacts from exchange rates and tariffs, and positive effects from raw-material prices. For the second half of the year, however, we expect raw-material costs to increase substantially and have already taken steps to address this,' said Continental CFO Roland Welzbacher.
In the second quarter, adjusted operating result or EBIT was 570 million euros, up 35.1 percent from 422 million euros, last year. Adjusted EBIT margin was at 12.9 percent, compared to 9.6 percent, a year ago.
Meanwhile, second-quarter net income fell 46 percent to 274 million euros from 506 million euros a year ago, mainly attributable to the spin-off of Aumovio. Earnings per share were 1.37 euros, compared to 2.53 euros last year.
Consolidated sales were 4.4 billion euros, down 9.1 percent from prior year's 4.9 billion euros. The decline in sales was mainly due to the sale of the Original Equipment Solutions business area at the beginning of February 2026. Before exchange-rate effects and changes in the scope of consolidation, organic sales declined by 0.3 percent. Adjusted sales were 4.41 billion euros, down 0.1 percent.
Looking ahead for fiscal 2026, excluding ContiTech following its planned sale, Continental Group's consolidated sales from continuing operations are projected in the range of around 13.2 billion to 14.2 billion euros with an adjusted EBIT margin of around 12.0 to 13.5 percent. Adjusted to continuing operations, Tires sales are anticipated around 13.2 billion to 14.2 billion euros with an adjusted EBIT margin of around 13.0 to 14.5 percent. The company said the guidance reflects continuing operations of its tire business alone.
For ContiTech group sector, Continental expects sales of around 4.2 billion euros to 4.8 billion euros and an adjusted EBIT margin of around 7.0 to 8.5 percent.
Continental previously expected consolidated sales of around 17.3 billion euros to 18.9 billion euros, including ContiTech, with an adjusted EBIT margin of around 11.0 to 12.5 percent.
Continental shares are trading at 70.86 euros on the Frankfurt Stock Exchange, down 2.07 percent.
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