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UPDATE 1-Continental expects to comfortably reach targets after strong Q1
April 28, 2017 / 6:58 AM / 7 months ago

UPDATE 1-Continental expects to comfortably reach targets after strong Q1

* Q1 adj EBIT around 1.2 bln euros vs poll avg 1.14 bln

* Q1 sales up 11.7 pct at 11 bln eur vs poll avg 10.6 bln

* Sticks with aim for 2017 adj EBIT margin above 10.5 pct (Recasts, adds Q1 sales and margin figures)

FRANKFURT, April 28 (Reuters) - German automotive supplier Continental said it expected to comfortably reach its financial targets for 2017 after its underlying earnings rose faster than expected in the first quarter.

“Continental made a very good start to the new fiscal year in a volatile environment,” Chief Executive Elmar Degenhart said in the statement on Friday, as the group published key quarterly figures ahead of its annual general meeting in Hanover, Germany.

Its adjusted operating profit (EBIT) rose around 10 percent to about 1.2 billion euros ($1.3 billion) in the three months through March, beating the consensus forecast of 1.14 billion in a Reuters poll of analysts.

Revenues were up almost 12 percent at 11 billion euros, also beating consensus, and the margin stood at 10.7 percent.

Continental, which makes driver-assistance technology, fuel-injection systems and vehicle tyres, has said it aims to raise annual sales by more than 6 percent to over 43 billion euros this year, despite rising raw material price, with a margin on adjusted operating profit of more than 10.5 percent.

The group is bolstering its electronics expertise as carmakers including Volkswagen and Ford raise spending on battery-powered and driverless cars in response to tougher anti-pollution rules and the emergence of new rivals such as Google.

On Tuesday, Continental said it plans to invest an extra 300 million euros in electric drives by 2021 in a move that may generate an additional 2 billion euros in sales by 2025.

Continental is due to publish full first-quarter earnings on May 9.

$1 = 0.9200 euros Reporting by Andreas Cremer and Maria Sheahan; Editing by Victoria Bryan

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