February 20, 2012 / 2:10 PM / 8 years ago

UPDATE 1-Continental dividend plan beats estimates

* 2011 div 1.50 eur/share vs StarMine consensus 0.49 eur

* Payout ratio implies 2011 net profit of 1.25 bln eur

* Full 2011 results due March 1

(Adds details, background)

FRANKFURT, Feb 20 (Reuters) - German auto parts and tyre maker Continental AG (CONG.DE) will pay its first dividend in four years at a higher-than-expected 1.50 euros per share, more than three times consensus estimates.

The payout for 2011 implies a full-year net profit figure, due on March 1, of 1.25 billion euros, below consensus of 1.43 billion.

Continental’s shares, which have advanced 42 percent so far this year, extended gains on the news and were up 2.6 percent at 70.10 euros by 1307 GMT.

Continental last paid a dividend - of 2 euros - for 2007, before the global financial slammed the brakes on demand for cars and led to two years of losses.

The average analysts’ forecast for the 2011 payment was 0.49 euros, according to Thomson Reuters StarMine.

Last year, Continental withheld its dividend to bolster its finances.

Continental said the total dividend payout would be about 300 million euros ($394.9 million), or 24 percent of net profit.

Continental was cautious after the end of the third quarter, saying in November that its full-year outlook looked challenging as costs for raw materials such as synthetic rubber and rare earth would be higher than expected. [ID:nL5E7M3186]

But recent news from the industry has been upbeat.

French rival Michelin (MICP.PA) raised its 2015 profit goal earlier this month, encouraged by demand from European and U.S. truckmakers, strong pricing and growth in outsize tyres for the mining industry. [ID:nL5E8DA0IN]

The industry’s No.1 player Bridgestone (5108.T) is also due to publish full-year results this month.

($1 = 0.7597 euros)

(Reporting by Maria Sheahan; Editing by David Cowell)

((maria.sheahan@thomsonreuters.com)(+49 69 7565 1286)(Reuters Messaging: Reuters Messaging: maria.sheahan.thomsonreuters.com@reuters.net)) Keywords: CONTINENTAL/

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