Pirelli raises fiscal 2011 outlook on higher Q1 results

ERJ staff report (TB)

Milan, Italy -- Pirelli Tyre SpA's pre-tax operating profit rose 59.6 percent in the quarter ended 31 March on 24.7-percent higher sales, as the company's consumer and industrial businesses both contributed improved results and higher sales.

The strong first quarter prompted Pirelli management to reaffirm the company's fiscal 2011 earnings target of 9 to 10 percent of sales and raise the sales outlook by more than 5 percent to about $8.7 billion (euro 58 471 million).

Pirelli Tyre reported $208.2 million in pre-tax operating income, after restructuring charges, on $1.89 billion in sales. Revenue growth was a mix of higher volume (6.1 percent) and an improved price/mix (15.9 percent), Pirelli said.

Pirelli's consumer tyre business reported 25.9-percent growth to $1.34 billion, with the industrial business growing 21.9 percent to $548 million.

Pirelli said higher production costs of $112 million, in particular for raw materials, were “comfortably offset” by the price/mix commercial component and actions to increase industrial efficiency.

In the consumer business, Pirelli reported growth of 7 percent in North American replacement sales and 16 percent in OE sales in North America. Replacement sales in Europe were up 8 percent but aftermarket business in Latin America dropped 2 percent.

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Article from Tire Business, a Crain publication