BERLIN (Reuters) -- German auto parts and tire maker Continental AG nudged back its sales outlook for the year, blaming weaker-than-expected demand for aftermarket tires in Europe.
Full-year sales may increase to about 34 billion euros ($45 billion), Continental said today, after predicting in early May that sales would exceed that level. The supplier reported sales of 32.7 billion euros in 2012.
"Optimism has lessened," finance chief Wolfgang Schaefer told Reuters, citing a weaker outlook for replacement passenger car tires.
European auto markets may rebound slightly in the second half after vehicle production fell 6 percent during the first six months, Schaefer said, noting the bottom in the region's slump has now been reached.
Continental had trimmed its forecast for growth in replacement tire sales in the core European market, accounting for more than 60 percent of its tire sales, to 1 percent from 3 percent, said the CFO.
Third-quarter sales will probably be flat on the April-June period when they rose 4 percent to 8.54 billion euros, the company said, also citing flattening car production in Asia and the NAFTA region covering the United States, Canada and Mexico.
Still, Continental stood by a goal to hold its operating profit margin above 10 percent, after 11 percent last year. Second-quarter adjusted earnings before interest and tax (EBIT) edged up 2 percent to 980.7 million euros, beating the 972 million-euro high-end forecast in a Reuters survey.
"The slight downward revision of targeted sales in 2013 is a bit of a surprise," Hanover-based NordLB analyst Frank Schwope said. "But it seems only a little problematic given that they're holding to the margin target."