Hanover - Giant German auto supplier, Continental AG, which is attempting to fend off a hostile takeover bid, reported Thursday a 36-per-cent fall in second-quarter earnings.

The Hanover-based tyremaker and brake systems manufacturer said net profit fell to 194 million euros (303 million dollars) from 303 million euros in the same period last year.

This follows the company's 11.4 billion-euros purchase last year of Siemens VDO auto parts business.

Continental is facing an 11.3 billion-euros takeover bid from the much-smaller family-owned auto supplier group Schaeffler, which said it already controls about 36 per cent of its bigger takeover target.

The Continental board last week formally rejected Schaeffler's 70.12 euros a share bid as too low. Continental's shares were trading at just over 73 euros following the release of ist latest quarterly results.

Continental said its second-quarter earnings before interest and tax (EBIT) edged down 4 per cent to 455.7 million euros.

Releasing its latest quarterly results, Continental reaffirmed its full-year business targets.

However, Continental Chief Executive Manfred Wennemer said while the company expects to post sales exceeding 26.4 billion euros as planned, he warned its target will be more difficult to achieve as a result of cuts in US production. (dpa)