Continental AG:Good Chance Of Higher Sales, Earns In 1Q
FRANKFURT -(Dow Jones)- German tire maker and auto supplier Continental AG ( CON.XE) expects to post higher sales and earnings in the first quarter of the year, Chief Executive Manfred Wennemer told reporters late Thursday.
"Chances to reach our goal of higher sales and earnings (in the first quarter) are good," Wennemer said, without providing any specifics.
In the first three months of 2005, Continental posted sales of EUR3.25 billion and earnings before interest and taxation of EUR281.7 million.
Wennemer also reiterated that Continental has around EUR4 billion available for acquisitions and didn't rule out the amount could be used for a single purchase.
However, "we prefer to make a series of smaller acquisitions," he added.
The acquisition of Phoenix AG in 2004, which cost Continental around EUR500 million, was a reasonably sized transaction, Wennemer said.
Continental is said to be interested in Autoliv Inc. (ALV), a Swedish maker of car safety products like airbags and seat belts.
Hanover-based Continental has also signaled theoretical interest in Delphi Corp (DPH) and Dana Corp (DCN), which are operating under Chapter 11 protection.
Continental's interested in the two U.S.-based companies ranges from relatively small parts to entire business segments that could also be located outside the U.S., Wennemer said.
"We know which parts we're interested in," he said, without elaborating.
Continental previously said it seeks to strengthen its Automotive Systems unit with acquisitions of electronics activities in the U.S. and Asia.
Acquisitions for the tire operations would likely be in Asia, Continental has said.
Wennemer also said it is very unlikely that Continental itself could be taken over, but conceded the danger still exists.
But the possibility of becoming a takeover target has reduced considerably since 2001, given that the company's market capitalization has risen to around EUR13 billion from EUR2 billion, he said. At the same time Continental has reduced its debt significantly, Wennemer added.
In theory, "it would require two or three financial investors to pay around EUR20 billion," to take over Continental, Wennemer said.
Company Web site: www.conti.de
-By Michael Brendel; Dow Jones Newswires; +49 69 29 725 500; michael.brendel@ dowjones.com
(END) Dow Jones Newswires
03-24-060321ET
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