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UPDATE 1-Continental backs higher sales target, raises dividend
March 2, 2017 / 8:07 AM / 9 months ago

UPDATE 1-Continental backs higher sales target, raises dividend

* Adj oper profit slips 0.6 pct to 4.34 bln euros

* Aims to keep adj EBIT margin above 10.5 pct

* To raise dividend to 4.25 eur per share from 3.75 eur (Adds detail and background)

BERLIN, March 2 (Reuters) - Germany’s Continental AG has reinforced expectations for higher sales this year and plans to raise the dividend after posting profit near the high end of expectations.

One of the world’s biggest suppliers to the automotive industry, Continental said it would benefit this year from further growth in global autos production and returns on investments in self-driving technology.

“The start into the new year has confirmed the expectations set for 2017,” Continental said on Thursday, citing a goal to raise sales by more than 6 percent to over 43 billion euros ($45.28 billion) despite rising raw material prices.

The maker of driver-assistance technology, fuel-injection systems and vehicle tyres said adjusted operating profit eased 0.6 percent to 4.34 billion euros, near the highest forecast of 4.37 billion in a Reuters poll of analysts.

Hanover, Germany-based Continental expects to keep its 2017 margin on adjusted earnings before interest and tax (EBIT) above 10.5 percent, after 10.8 percent last year.

Continental is bolstering its electronics expertise as carmakers including Volkswagen and Ford raise spending on battery-powered and driverless cars in response to tougher anti-pollution rules and the emergence of new rivals such as Google.

The automotive supplier and tyre maker plans to increase the dividend to 4.25 euros per share from 3.75 euros in 2015. The group had already reported core results on Jan. 9. ($1 = 0.9497 euros) (Reporting by Andreas Cremer; Editing by Maria Sheahan)

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