PARIS (April 29, 2008) — Michelin's sales in the first quarter fell 2.6 percent to $6.45 billion entirely on the effects of currency changes, but company management is still confident the firm can achieve “moderate” net sales growth this year with operating income approaching the 2007 level.
For the quarter ended March 31, Michelin reported unit sales grew 1.1 percent and the firm experienced a 1.7-percent revenue boost from improved pricing.
Michelin said its “trading environment was less supportive than initially anticipated,” with most of the mature countries' tire markets down, except for original equipment truck tire shipments in Europe.
By contrast, Michelin said, the emerging countries' markets posted very satisfactory growth, in both passenger/light truck and medium truck tire segments.
Michelin did not disclose earnings at this time but said raw material costs continued to climb throughout the quarter. As a result, Michelin expects to incur nearly $950 million in additional costs related to raw materials.
To deal with this situation, Michelin said it is intent on pursuing its pricing policy aimed at offsetting external cost inflation.