Continental Q3 operating profit 400 mln eur -paper

FRANKFURT, Oct 28 (Reuters) - German auto parts supplier Continental AG (CONG.DE) improved its operating profit in the third quarter and plans a capital hike early next year, a German newspaper reported on Wednesday.

The Financial Times Deutschland said Continental's adjusted operating profit was more than 400 million euros ($593 million) in the third quarter, adding that this was an improvement of almost 100 million euros from the year earlier quarter.

The FTD did not cite sources for its story, which it released in advance of publication on Thursday.

Continental, which is due to report third quarter earnings on Thursday, was not immediately available for comment.

The average of seven forecasts in a Reuters poll was for adjusted earnings before interest and tax (EBIT) to fall to 298 million euros in the third quarter from 342 million in the year-earlier quarter.

The paper said that Continental planned to write 870 million euros off the value of electronics unit VDO, which it bought from Siemens (SIEGn.DE) two years ago. It added that one-off effects totalling 1.36 billion euros would weigh on Continental's earnings in the third quarter, resulting in a net loss in the billion euro range.

Analysts polled by Reuters had expected a net loss of 44 million euros in the third quarter.

Continental was also targeting a capital increase in the first quarter of 2010, with a volume of 1 billion to 1.5 billion euros, the paper said.

Continental's syndicated lenders have made a capital hike a precondition to refinancing 3.5 billion euros in debt due to mature in August of next year.

The paper said Continental aimed to wrap up talks with its banks in the first quarter and added that the company currently has 3.3 billion euros in cash.