Continental Withdraws 2020 Outlook, Warns of 1Q Pandemic Hit
April 01 2020 - 3:59AM
Dow Jones News
By Olivia Bugault
Continental AG said Wednesday that it is withdrawing its 2020
guidance as the coronavirus pandemic has already significantly hit
its first-quarter results.
More than 40% of Continental's production sites world-wide have
temporarily stopped operations, with its automotive and tires
divisions being particularly badly hit, the German automotive-parts
manufacturer said.
"Given the uncertainty around the duration of the disruptions,
as well as the difficulty in gauging possible further consequences
on production, the supply chain and demand, the executive board of
Continental has decided to withdraw the outlook for fiscal 2020,"
Continental said.
Continental warned of the financial effects of the coronavirus
on its first-quarter results and said it expects consolidated sales
to be roughly 9.4 billion to 9.8 billion euros ($10.33
billion-$10.78 billion). The company said its adjusted earnings
before interests and taxes margin should come in at around 2% to 3%
for the period.
At its automotive divisions, sales should be around EUR5.7
billion to EUR5.9 billion, while the adjusted EBIT margin should be
roughly 0%, it said.
The company said it has been implementing cost-cutting measures
to mitigate the effects of the pandemic. Measures include cutting
wage and salary costs as around 30,000 of its employees are doing
short-time work in Germany.
Continental said it has EUR2.3 billion in liquidity and around
EUR4.6 billion in unused credit lines.
Write to Olivia Bugault at olivia.bugault@wsj.com
(END) Dow Jones Newswires
April 01, 2020 03:44 ET (07:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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