German automotive and industrial supplier Continental cut its annual sales guidance for the second time this year on Monday, citing weak industrial demand in Europe and North America, but it beat profit expectations to send its shares higher.

Shares were up 6.16% at 0823 GMT, outpeforming the broader index, after third-quarter core profit, at 873 million euros (USD 932.80 million), beat the consensus by about 11%.

The group's margin of 8.9% for the quarter also surpassed expectations of 7.9%.

It said profits rose in response to price discipline and cost-cutting in its automotive division, which it wants to spin off by the end of 2025.

Continental expects sales for 2024 to be between 39.5 billion and 42 billion euros, below its 40-to-42.5 billion euros guidance in August, and in line with sales expectations for the year in a company-compiled consensus.

It confirmed sales and earnings guidance for the automotive division, which last year accounted for almost half of sales.

Continental had already cut its sales guidance in August, citing weaker demand for passenger cars in Europe and for tyre replacements in North America.

The latest cut was a result of downward revisions in the ContiTech business, which supplies industry as well as carmakers.

European carmakers face hurdles including high costs and fierce Chinese competition, in turn hitting their suppliers.

Carmakers BMW, Mercdes-Benz, and Stellantis have all issued profit warnings this year, and Volkswagen plans wage cuts and plant closures.

Automotive supplier Schaeffler announced job cuts last week, days after the chairman of Robert Bosch, the world's largest, said further layoffs might be needed at his firm.

Continental also announced job cuts in the automotive division in February.