Pirelli earnings up slightly; sales up 13%

Milan, Italy — Pirelli & C. SpA reported a slight gain in operating income for the quarter ended March 31 on 13.4-percent higher sales, reflecting continued growth of the firm's premium segment.

Pirelli's operating income for the period rose 1.5% to €160 million while sales revenue grew to €1.27 billion.

The figures reported for the first quarter reflect the reconfigured, purely consumer-business Pirelli, without the truck and farm tire activities that now are part of TP Industrial Holding.

Pirelli said organic growth accounted for 8.4% of the revenue increase, with favourable foreign exchange rate changes responsible for 4% and the consolidation of the car activities of Jiaozou Aeolus another 1%.

Pirelli said Jiaozu Aeolus has begun converting its product range to the Pirelli brand, in line with the firm's aim of accelerating development in China.

Premium revenues rose 16% during the quarter, Pirelli said, and now represent 67.8% of total sales, up from 66.2% a year ago.

Unit volumes of premium tires grew 15.3%.

Viewed geographically, Pirelli said its Asia/Pacific and NAFTA sectors achieved the highest profitability among all the macro-areas.

Revenues in the APAC and NAFTA areas increased 26.6% and 16.5%, respectively, while Europe showed 7.8% growth.

South America, on the other hand, registered a 3.2% drop in organic sales — i.e., excluding foreign exchange and perimeter variations — reflecting lower sales in the non-premium segment. Pirelli attributed this decline to the steady shift toward premium products in North America and the shrinking car market in Argentina.