MILAN, Italy (Nov. 10) — Pirelli & C. S.p.A. reported improved sales and operating earnings for the first nine months of fiscal 2006, although earnings growth did not keep pace with sales growth because of the effect of higher raw materials costs.
The company also reported a net loss of $1.75 billion, reflecting the write-down of the firm's equity investment in the telecom holding company Olimpia S.p.A. Factoring out this charge, Pirelli said the comparative net result would have been $368.9 million, an 11.3-percent improvement.
Otherwise, Pirelli reported operating income for the nine months of $372.8 million—a 7.8-percent improvement—and sales of $4.51 billion.
Pirelli Tyre represents the bulk of Pirelli's operations, accounting for $3.72 billion in sales and $346.8 million in earnings, improvements of 10.5 and 2.8 percent, respectively. Sales grew because of a mixture of volume growth (3.9 percent), improved price/mix (3.4 percent) and exchange rate benefits (3.2 percent), Pirelli said.
Pirelli said its "selective growth" in North America continued, "notwithstanding negative demand." In Europe sales grew in the high-performance and winter tire categories, as well as in truck tires and steel cord to third parties. Globally motorcycle tire sales were up 14 percent over 2005.
Pirelli's sales grew 13.1 percent in the quarter.