Continental AG (CTTAY) , Europe's second-largest tire maker, cut its earnings outlook for fiscal 2016 as warranty and antitrust provisions added to supply-chain woes.

The Hanover, Germany-based supplier of tires, brake systems, and powertrains, cut its margin on adjusted earnings before interest and tax (Ebit) for fiscal 2016 to over 10.5% from over 11% late Monday despite maintaining its sales outlook. 

Continental shares fell 3.9% to €168.45 early Tuesday, making it the biggest decliner on the DAX performance index in Frankfurt.

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The margin downgrade comes as a result of around €480 million ($528 million) in negative impacts on adjusted Ebit from several independent factors, including anti-trust and warranty cases.

This includes around €390 million for products in the chassis & safety and interior divisions between 2004 and 2010 as well as pending antitrust proceedings. It also includes at least €100 million in sales losses at the interior division following disruptions at a micro control units supplier in Kumamoto, Japan, which was hit by a third earthquake in August 2016. Production had already been hurt by two earlier earthquakes in the region in April.

Continental also cited short-term increase in R&D expenses of €60 million in the interior and powertrain divisions resulting from "significantly accelerated transformation in the automotive industry."

The company maintained its sales outlook on a constant currency basis at €41 billion.

Continental shares have dropped around 15% in the past twelve months.