Pirelli Tyre earnings up in Q3 on reduced costs

Crain News Service

Milan, Italy - Pirelli Tyre S.p.A. reported measurable gains in operating and net income in the third quarter as sales nearly equalled those of the 2008 period.

Pre-tax operating income before restructuring charges jumped nearly 55 percent to $207.3 million as sales hit $1.52 billion. Net income more than quintupled to $52.6 million.

Pirelli attributed the earnings improvement to a decline in raw materials costs, the focus on price/mix, actions for greater competitiveness and a recovery in the market, accompanied by sales growth at higher rates than the market in all areas.

Revenues for the nine months ended 30 Sept. amounted to $4.32 billion, down 4.5 percent from the 2008 period. Pre-tax operating income for the year to date was up 1.2 percent to $558.8 million, improving the profit ratio a full point to 12.9 percent.

Pirelli reported sales in its consumer business rose 3.1 percent to $1.07 billion on improved replacement market demand and smaller-than-expected declines in OE sales. Sales for the nine-month period were down 4.5 percent to $3.08 billion.

Industrial business sales fell 12.2 percent in the quarter to $447.7 million and 16.7 percent for the year to date to $1.24 billion.

Pirelli said the industrial segment is more cyclical because it is linked to macro-economic performance, thereby accounting for lower tire and steelcord sales.

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Pirelli Tyre earnings up in Q3 on reduced costs from Tire Business (a Crain publication)