Michelin predicts economic factors to push operating earnings lower

PARIS (Sept. 19)—Uncertain economic conditions prevailing in the second half of 2000 might mean a swing of $250 million or more in Groupe Michelin´s operating earnings this year, the company said in a forecast. For the first half of 2000, Michelin saw operating earnings fall 9.4 percent to $532.5 million, because of the combined effects of rising raw material prices, fluctuating currency values and inventory adjustments. In particular, Michelin singled out the "lower level of profitability" in the U.S. and Japan and raw material price increases of nearly 15 percent as contributing factors in the decline. Sales for the period rose 13.7 percent to $7.28 billion. Net earnings fell 27.7 percent to $231.2 million. For the full year, Michelin said its operating margin likely would lie between 7.3 and 9 percent, depending on the strength of the global economy.