BERLIN -- Continental said it expects strong earnings in the fourth quarter after profit plunged 40 percent in the July-to-September period because of special effects.
Adjusted earnings before interest and tax (EBIT) declined to 645.2 million euros ($706.17 million) in the third quarter from 1.07 billion a year earlier, the German supplier said today in a statement.
Quarterly results from the company's core automotive division took a 450 million euro hit from the costs of warranty cases for unspecified products and pending antitrust proceedings as well as increased spending on research and development, Continental said.
The group last month cut its profit guidance for the year after announcing the impact of special cost effects on its annual results.
Future development spending
In separate comments, the company's finance chief, Wolfgang Schaefer, said Continental will continue to raise spending on development in the coming years, particularly in relation to electric-car technology, but expects no major impact on earnings thanks to additional sales from new r&d projects.
"This [need to raise spending on electric-car software] should not lead to a situation in which our results are burdened," Schaefer told Reuters today.
The supplier also expects more currency fluctuations in the wake of Donald Trump's victory in the U.S. presidential elections, but sees no major negative impact on its U.S. operations, the CFO said.