(Reuters) -German car parts supplier Continental reported a slightly lower than expected second-quarter profit margin at its core tyres business on Tuesday, citing headwinds related to U.S. import tariffs and foreign exchange rates.
The company said its adjusted earnings before interest and taxes (EBIT) margin rose 12% in the April-June period, down from 14.7% a year ago, compared to a company-compiled consensus of 12.5%.
In June, the firm cut its profitability targets for both its core tyre business and the broader group.
Continental is in the process of splitting off two of its three businesses, seeking to reposition itself as a pure-play tyre maker that it hopes will leave it better placed to handle a volatile market rattled by tariffs imposed by the United States.
The automotive division generated profit margin of 4%, higher than 3.8% expected by analysts, thanks to cost-cutting measures and sustained price adjustments, the company said, adding it showed a positive momentum ahead of its listing on stock exchange on September 18.
“We’ve worked hard to make our group sectors more resilient and more agile,” CEO Nikolai Setzer said in a statement.
(Reporting by Amir Orusov in Gdansk; Editing by Matt Scuffham)
