Continental stock gains as tire strength lifts 2026 outlook

Continental's third-quarter performance prompted a higher 2026 outlook on Wednesday, November 4, as the tire business offset weak automotive markets and replacement demand in parts of the Americas. In its press release, the company said adjusted EBIT rose to 514 million euros in the third quarter from 482 million euros a year earlier.

Adjusted EBIT margin improved to 14.9 percent from 13.9 percent. Continuing-operations sales fell to 3.5 billion euros from 3.9 billion euros, with the decline mainly reflecting the sale of the Original Equipment Solutions business at the beginning of February 2026. Organic sales decreased 1.5 percent before exchange-rate effects and changes in the scope of consolidation.

Tire Mix Supports Earnings

Continental attributed the stronger profitability to higher sales of ultra-high-performance tires, slightly positive exchange-rate effects, lower tariff impacts and commercial measures responding to higher raw-material costs. Europe remained the earnings backbone: the EMEA Tires region posted a 18.7 percent adjusted EBIT margin, up from 17.7 percent in the prior-year quarter.

Performance in the Americas was more difficult. Regional sales declined 5.0 percent to 1.1 billion euros, while the adjusted EBIT margin edged up to 8.7 percent from 8.5 percent. In APAC, sales rose 4.7 percent to 476 million euros, but the adjusted EBIT margin slipped to 18.6 percent from 19.0 percent.

Net income for continuing and discontinued operations reached 349 million euros, compared with a loss of 756 million euros in the prior-year quarter. Continental said special effects from the Aumovio spin-off and preparations for the OESL sale had weighed on the earlier result. Adjusted free cash flow for continuing operations, however, fell to 31 million euros from 99 million euros.

Higher 2026 Targets, Tougher Fourth Quarter

For continuing operations, Continental now expects 2026 sales of 13.5 billion to 13.9 billion euros, compared with the previous range of 13.2 billion to 14.2 billion euros. The adjusted EBIT margin target was lifted to 13.4 to 14.0 percent from 12.0 to 13.5 percent, while adjusted free cash flow is now expected at 1.0 billion to 1.3 billion euros, up from 0.7 billion to 1.1 billion euros.

Management also narrowed the outlook for discontinued ContiTech operations to sales of 4.2 billion to 4.4 billion euros and an adjusted EBIT margin of 6.5 to 7.5 percent. CFO Roland Welzbacher cautioned that higher raw-material prices would affect earnings more strongly in the fourth quarter. Continental expects further volume pressure, making the raised annual targets dependent on continued execution in the tire business.

Continental stock traded at 74.19 euros on Lang & Schwarz at 10:11 CET on Wednesday, November 11, 0.94 percent above the Xetra close of Tuesday, November 10.

European equities remain the relevant market backdrop for Continental, with the DAX providing the main regional benchmark.

Investors will focus next on fourth-quarter margin delivery, raw-material costs and the company's next financial update. More news and analyses on Continental stock.