FRANKFURT -- German car components supplier Continental AG trimmed its profit forecast for the year, citing warranty cases and possible expenses for antitrust proceedings as well as supply disruptions following earthquakes in Japan.
The 2016 group margin on adjusted earnings before interest and tax will be over 10.5 percent, compared with a previous forecast for more than 11 percent, Continental said in a statement on Monday.
It also lowered its 2016 margin forecast at the automotive business, which accounts for about 60 percent of group sales, to more than 6.5 percent from above 8.5 percent.
Warranty cases for products supplied by the group's chassis and safety and interior divisions between 2004 and 2010, as well as possible expenses for pending antitrust proceedings, will have a negative impact of 390 million euros ($437 million) on annual results, Continental said.
A third earthquake in the Kumamoto region of Japan in late August worsened matters for an important supplier of micro control units located there, resulting in lost sales of at least 100 million euros, and an increase in research and development costs will add another 60 million euro hit, it said.
Continental affirmed its forecast for 2016 sales of around 41 billion euros before exchange-rate effects.