Michelin net profits fall 36% for 2006

Paris -- Michelin's net income declined 36 percent in 2006 from a year earlier because of high raw material and restructuring costs, although sales rose 5.1-percent.

The company's net earnings fell to $719 million on sales of $20 600 million, based on the 2006 average annual exchange rate.

Michelin said price increases kept its operating income at a high level, 8.2 percent before non-recurring charges. For the year, the company's operating profits before non-recurring items fell by 2.2 percent to $1680 million.

The French tyre maker expressed optimism about increasing its sales and operating margin in 2007 as most global markets are expected to grow and external costs should improve.

In North America, Michelin said the high-performance replacement passenger and light truck tyre market continues to grow, and its Michelin and BFGoodrich brands gained market share. Sales of private and associate brands again showed a marked decline.

Michelin said the original equipment market in North America fell sharply, and the company's sales in that sector were down.

The company said it gained market share in aftermarket truck tire sales on the continent, but lost some OE share.

From Rubber & Plastics News (A Crain publication)