STOCKWATCH Continental higher after solid Michelin figures

STOCKWATCH Continental higher after solid Michelin figures

	Published : Wed, 25 Apr 2007 13:01 By : Agencies Print this Story

... figures (refiling to fix current share price in 5th para)

FRANKFURT (Thomson Financial) - Shares in Continental AG were higher in midday trade, discounting the 2.00 eur dividend it paid out today, as traders pointed to much better-than-expected revenue figures released last night by French peer Michelin, dealers said.

'The Michelin figures certainly fuel hopes that Continental's first-quarter figures [to be released May 3] will be better than expected,' said analyst Horst Schneider from WestLB.

'We have mainly looked at Michelin's comments on passenger tyre markets since this represents the major part of Continental's tyre activities,' he said.

Michelin reported that European passenger car and light truck replacement markets grew by almost 2 per year-on-year, driven by a 10 pct jump in Eastern Europe.

At 1.33 pm, shares in Continental were trading at 100.00, up 1.60 pct or 1.60 eur, discounting a 2.00 eur per share dividend paid out today. In ex-dividend trade its shares were down only 0.40 eur or 0.40 pct. The DAX, meanwhile, was 44.40 points or 0.61 pct higher at 7,314.72.

Schneider said: 'It might be worth betting on better first-quarter figures at Continental but the consensus should not be overly optimistic about Continental's tyre sales and earnings.'

The brokerage reiterated its 'hold' rating on Continental and its price target of 102 eur per share.

Last night, Michelin said first-quarter sales reached 4.2 bln eur, a 5.5 pct increase year-on-year, as higher volumes and the impact of pricing and product mix offset negative currency effects, while the tyre maker reiterated its full-year guidance of a 'tangible increase' in sales and operating margin before exceptional items.

By region, Michelin underlined have ry strong growth' in truck tyres in Europe, thanks to a healthy economic climate.

The company also cited strong growth in emerging markets, led by China.

Tyler.Sitte@thomson.com

ts/ts/rfw

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