Pirelli reports increase in operating, net income

Milan, Italy — Pirelli & C. SpA reported increased operating and net income for the quarter that ended March 31 on 6.5 percent higher sales, with the consumer business outperforming the commercial business.

Operating earnings rose 4.5 percent to $236.9 million (€215 million) while net income was up 12.2 percent to $114.3 million. Revenue rose to $1.77 billion, leaving the operating margin essentially unchanged at 13.4 percent.

Pirelli attributed the earnings performance on a combination of positive effects from the price/mix correlation, manufacturing efficiencies, lower raw materials expenditures and foreign exchange rate changes.

Pirelli’s consumer business (car/light truck and motorcycle tires) outperformed the commercial sector, reporting a 9.6 percent sales improvement vs. a 3.8 percent sales drop.

Consumer business sales rose to $1.4 billion, although unit volume was up only 0.4 percent, Pirelli said. The growing weight of higher value-added premium products (now nearly 59 percent of the business) helped push the revenue up. Premium unit sales grew 10 percent in the quarter, Pirelli said, with especially high growth in Asia/Pacific, Middle East/Africa and Latin America.

Overall, Pirelli’s North American business grew 17.3 percent in the period to $230 million, or 13 percent of global revenue.

Commercial business unit volume sank 6.7 percent in the period, Pirelli said, with larger decreases noted in Latin America, Europe and China.