Conti Expects Big 2006 Results - Tire Review Magazine

Conti Expects Big 2006 Results

(Akron/Tire Review) A Reuters report out of Europe says that Continental AG expects to post “record-beating revenue” and net profit in 2006, but is counting on “innovation and cost-cutting” to help it post those profits.

"We don’t expect to receive any support from the global car market in 2006,” Continental Chariman Manfred Wennemer told Reuters, “Rather, we are counting on innovation and cost-cutting to bring us growth and a tidy margin.”

Continental officials said the company expects to post “all-time highs” for sales, earnings before interest and net profit in 2005.

At the same time, Alan Hippe, Continental AG’s chief financial officer and president and CEO of Continental Tire North America, suggested the company may pay out a “significant” dividend for the year. But Hippe played down talk that Continental would buy back outstanding shares, saying instead that the company would use some of its profits to reduce a "generous" part of its $1.48 billion in outstanding pension liabilities.

Hippe also said that the CTNA unit he heads improved its earnings in the second half of 2005, thanks to strong winter tire demand in Canada. Continental reported that global sales of winter tires increased 11% in 2005 to just over 17 million units.

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