Continental Slashes 2023 Truck Tire Sales Forecast
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Continental AG slashed its expectations for North American commercial vehicle replacement tire sales in 2023.
The tire manufacturer expects 2023 commercial vehicles replacement sales to slump 17%-19% compared with 2022, having expected sales to decline only 8%-10% three months earlier, it said Nov. 8 when releasing third-quarter 2023 earnings.
Continental posted a profit of $319.5 million, as diluted earnings per share came in at $1.59. That compares with a $225.5 million loss in the year-ago period, or a loss of $1.12 per diluted share, due to a $532.2 million charge against earnings related to its Automotive group.
Continental posted consolidated sales of $10.9 billion in Q3, a 1.5% decrease compared with $11.12 billion in the same period a year earlier.
Continental reports its earnings in euros and conversions are based on Nov. 8 exchange rates.
Its midyear forecast was weaker than expectations at the end of the first quarter, when Hanover, Germany-headquartered Continental expected a 2%-5% decrease in commercial vehicle replacement tire sales across the U.S., Canada and Mexico.
Commercial vehicle replacement tire sales in the third quarter alone in North America fell 21% year-over-year, the company said, without providing any further results.
Continental also cut its European commercial vehicle replacement tires sales guidance for 2023 to down 11%-13% from a decrease of 6%-8%. Commercial vehicle replacement tire sales in Europe in Q3 fell 4% year-on-year.
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The company’s overall Tires group — including a slightly better performing passenger cars and light trucks segment — saw sales fall 5.4% year-on-year to $3.63 billion from $3.85 billion in the third quarter of 2022.
Chief Financial Officer Katja Garcia Vila said during the company’s earnings call Nov. 8 that the Tires unit turned in solid results in weak markets and Continental expects demand to be worse in 2024.
Concentrating on premium tire markets helped those results, Garcia Vila said, which was a boon due to demand prospects and because raw material prices are increasing from a low base, and this will continue in 2024.
