MILAN, Italy (March 28, 2008) — Pirelli & C. S.p.A. management, citing the uncertain world economy, expects financial results this year to be about on par with those of fiscal 2007, which were up marginally over 2006.
Pirelli management sees a slightly better year for its Pirelli Tyre S.p.A. unit—which accounts for 80 percent of the firm's sales—despite concerns over rising operational costs and the strengthening euro.
For 2007, Pirelli Tyre reported improved net and operating earnings as higher sales volumes and improved pricing and product mix, complemented by gains in productivity and cost containment, generated sufficient cash to overcome higher production costs and the negative effects of the exchange rate changes.
Pirelli Tyre reported net income of $288 million (up 5.6 percent), pre-tax operating income of $489.9 million (up 4.6 percent) and sales of $5.69 billion (up 6.5 percent).
By business unit within Pirelli Tyre, the consumer tire area (passenger, light truck and motorcycle tires) reported sales of $3.92 billion and operating income of $345.4 million, gains of 4.6 and 4.9 percent, respectively. Pirelli cited sales gains in all its geographic operating units for the improvements.
Pirelli's industrial business (tires for commercial vehicles and steelcord) reported 7.1-percent higher sales of $1.78 billion and 3.8-percent better operating income of $144.5 million. Growth came primarily from South America and China.
For 2008, Pirelli is forecasting measurable sales gains in South America and Asia in both the replacement and original equipment (OE) markets for both the consumer and industrial businesses. The company sees a 5-percent drop in OE demand in North America and a 1-percent rise in the replacement market.
Overall, Pirelli reported net income of $225 million on revenues of $8.9 billion.
In addition, Pirelli said it would not make public its three-year business plan, due to market volatility. Pirelli said it expected to reveal details by the end of October.