CON Continental AG

   By Nathan Allen 
 

Continental AG (CON.XE) said Wednesday that it is changing course at its powertrain business to focus more on electric-vehicle technology as it reported a sharp drop in second-quarter earnings.

Net profit at the German automotive-parts company fell to 484.8 million euros ($543.1 million) from EUR822.1 million a year earlier. Sales slipped to EUR11.26 billion from EUR11.37 billion, the company said.

"The current market environment is highly challenging. The key automotive markets of Europe, North America and particularly China are declining," Chief Executive Elmar Degenhart said. In July the company cut its guidance for earnings and sales guidance.

Continental said it doesn't expect any upturn in the market over the short to medium term.

Given the falling demand for combustion engines, Continental said it has stopped further expansion of its hydraulic-components business, which includes injectors and pumps for gasoline and diesel engines.

Continental will instead focus on electric drive-train technology, although it has decided not to go ahead with an earlier mooted plan to produce solid-state batteries.

The company will also analyze its exhaust-gas after-treatment and fuel-supply systems due to intensive price pressure, it said.

Write to Nathan Allen at nathan.allen@dowjones.com

(END) Dow Jones Newswires

August 07, 2019 03:08 ET (07:08 GMT)

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