Tires Drive Conti’s 35% Earnings Growth as ContiTech Becomes ‘Discontinued’

Continental AG has reported a 35.1% year-on-year increase in second-quarter adjusted earnings, driven by its tires business, which offset a weaker market environment. The company’s group sales for the second quarter of fiscal year 2026 fell 9.1% year-on-year to €4.4 billion, mainly due to the February sale of its Original Equipment Solutions business. On an organic basis, sales declined 0.3%. Adjusted earnings increased 35.1% to €570 million, while the adjusted earnings margin improved to 12.9% from 9.6% a year earlier. The tires business reported second-quarter sales of €3.3 billion, down 0.2% year on year, although organic sales edged up 0.3%. The division’s adjusted earnings margin improved to 15.3% from 12.1%, driven by a stronger mix of larger-diameter tires, favorable raw-material prices, and lower impacts from exchange rates and tariffs. ContiTech, which is being sold to Lone Star, generated second-quarter sales of €1.1 billion, down 29.5% year-on-year, with an adjusted earnings margin of 6.9%, compared with 8.0% a year earlier. Following the sale, Continental maintained its full-year fiscal 2026 guidance for the tires business, forecasting sales of €13.2-14.2 billion and an adjusted earnings margin of 13.0-14.5%. The company expects group sales of €13.2-14.2 billion, an adjusted earnings margin of 12.0-13.5%, and adjusted free cash flow of €700 million – €1.1 billion for the full year.