Michelin expects 2nd half earnings improvement

PARIS (July 30)—Groupe Michelin, with better-than-expected first half results, is forecasting a slight rise in its operating profits for the full year. The company said the improvement still depends on continued stability in raw material prices and exchange rate parity. For the first six months of fiscal 2002, Michelin reported a 16-percent rise in operating income, to $511 million, on 1.4-percent better sales of $7 billion. Michelin credited a "sharp" drop in raw materials prices along with internal cost containment initiatives for the gain. Net earnings, excluding a one-time capital gain in the 2001 period, nearly quadrupled to $228 million. Michelin's unit sales volume was up 2.2 percent for the period, but the sales revenue gain was held back by negative currency fluctuations. In North America, Michelin said it raised its market share and improved its product mix in the passenger and light truck aftermarket and growth of its original equipment sales outpaced the industry increase.