HANNOVER (dpa-AFX) - The automotive supplier and tire manufacturer Continental expects business in the European automotive supply market to remain difficult this year. The market there is likely to perform at the lower end of its own assumptions for the year as a whole - the Chinese market, on the other hand, is likely to be the main driver of growth, according to a Conti summary at an analysts' conference on Wednesday evening. The share price jumped significantly on Thursday due to surprisingly confident statements about profitability.

Conti shares, which have been very weak in recent months, gained almost ten percent to 59.06 euros at the top of the Dax at midday. Following the very weak results from the first quarter in the automotive supplier division, the share price plummeted to just under 52 euros this week due to concerns about the annual forecast and thus to a low since November 2022. This year, the share price is still down by a good 23 percent - making Conti one of the weakest DAX stocks.

One market participant was positively surprised in the morning: the management's statements signaled an unexpectedly strong second quarter, after the first quarter of the year was probably the worst in a long time.

JPMorgan analyst Jose Asumendi expects Conti to be almost back in the black in the first half of the year with day-to-day car deliveries. Expert Michael Aspinall from Jefferies also assumes the same - and this implies a much better second quarter after the negative operating margin of 4.3 percent in the first quarter. This should provide the market with a great deal of relief in a difficult operating environment in the face of fluctuating car production.

In the second quarter, the Group made progress as expected in terms of price development compared to the beginning of the year, the Group said the previous evening. Conti is talking to car and truck manufacturers about price increases for the parts it supplies due to its own weak profitability. In the second quarter, the first effects of the cost-cutting program introduced in the automotive division should also become visible. The effect should grow over the course of the year. Conti is then targeting savings of around 400 million euros by 2025. To achieve this, the Group is cutting a total of 7150 jobs worldwide in administration and research and development.

In the tire business, the original equipment market for passenger cars and light commercial vehicles remained weak compared to the same period last year. However, as expected, the replacement tire markets showed initial signs of improvement in the second quarter. For Conti's tire division, however, the development of prices and the sales mix remained slightly negative for the time being - according to Conti, this should normalize in the second half of the year.

The Group holds a "pre-close call" for financial experts to summarize the latest developments before the usual week-long quiet period prior to the announcement of quarterly results. In the final weeks before the quarterly figures - the so-called "quiet period" - communication with interested parties on the capital market is then only to take place to a very limited extent. In recent times, such events have often caused the share prices of several companies to fluctuate. Conti says that it wants to increase transparency on the market by publishing the content of the events./men/nas/jha/