August 2, 2018 / 7:09 AM / 4 months ago

Continental confirms target despite expected hit from new anti-pollution rule

FILE PHOTO: Logo of German tyre company Continental is seen before the annual news conference in Hanover, Germany March 2, 2017. REUTERS/Fabian Bimmer

BERLIN (Reuters) - German auto supplier Continental (CONG.DE) said it was looking for a strong quarter at the end of this year, with new anti-pollution rules likely to hamper results in the third quarter.

“Carmakers close down plants for vacation in the third quarter. Furthermore, next quarter will probably be negatively impacted by the new test procedure WLTP,” the tyre and car components maker said on Thursday.

Volkswagen on Wednesday said the new rules were making it harder to achieve its financial targets.

However, Continental said it expected a strong final quarter and confirmed its recently lowered guidance of reaching sales of around 47 billion euros ($54.7 billion) before exchange-rate effects and an adjusted EBIT margin higher than 10 percent this year.

For the second quarter, it reported adjusted earnings before interest and tax (EBIT) of 1.16 billion euros on sales of 11.37 billion euros, slightly below expectations for 1.19 billion and 11.5 billion, according to a Reuters poll.

Reporting by Victoria Bryan and Edward Taylor; Editing by Maria Sheahan

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