Continental, one of the world’s biggest auto parts suppliers along with Bosch and Magna, reported on Monday quarterly earnings before interest and tax (EBIT) of 38.8 million euros ($54.9 million), helped by "the most extensive cost-cutting package in the company’s history."
Since September of last year, Continental has eliminated 16,000 jobs, or a good 10% of its entire workforce.
Adjusted for one-offs including restructuring and consolidation effects, EBIT swung to a profit of 238 million euros from a loss in the first quarter.
Sales were 460 million euros higher than in the first quarter, at 4.76 billion, but were down almost 30% compared with the year-earlier period.
Shares of Continental were up 4.1% at 25.25 euros by 0708 GMT, while the German blue-chip index was 0.8% higher.
"Despite a slight market upturn, for the time being there is no reason to give the all clear. In the second half of 2009 and beyond, the business environment will continue to be a major challenge for Continental as well as for the entire supplier industry," Chief Executive Karl-Thomas Neumann said.
Cash, cash equivalents and unutilised credit lines continue to be at a "solid level," it said.
The results come ahead of a key supervisory board meeting before the end of the month where management will present its directors with a merger and a standalone concept for the future of the group.
Neumann is examining whether it would make sense to merge with its more highly leveraged owner Schaeffler – itself essentially controlled by its banks – but German media reports have suggested the bearings maker wants to delay a merger until after the crisis in order not to lose influence. (Tire Review/Akon)
