Continental AG sees earnings and profitability rising this year as the automotive sector continues to recover from supply-chain and logistics disruptions.
(Bloomberg) — Continental AG sees earnings and profitability rising this year as the automotive sector continues to recover from supply-chain and logistics disruptions.
The German auto-parts maker said it expects its 2023 adjusted earnings margin of as much as 6.5%, an improvement of the 5% it reported for last year, according to a statement Wednesday. Shares rose more than 6% in early trading.
So far, carmakers and their suppliers have been able to off-set steep input costs by raising prices and working down full order books. Continental, however, warned that rising costs for raw materials, wages and energy will continue to weigh on its bottom line this year.
“We’ve stabilized our profit over the course of the year,” Chief Financial Officer Katja Dürrfeld said in a statement. “Nevertheless, we know we need to continue to improve to meet our medium-term goals.”
Continental has said its medium-term adjusted earnings target is between 8% and 11%.
The company released preliminary earnings in January, including sales of around €39.4 billion ($41.5 billion) for 2022 and an operating profit margin of around 5% — figures that largely met estimates. Continental in October won more than €2 billion in display orders as the industry accelerates a shift to electric vehicles.
(Updates with shares in second paragraph.)
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