MILAN (May 13, 2008) — Pirelli Tyre S.p.A. reported a slight drop in earnings as rising manufacturing costs and an unfavorable exchange rate change offset improved pricing and product mix for the quarter ended March 31.
Pirelli Tyre net income slipped 0.7 percent to $91.2 million. The firm said its pretax operating income fell 3.2 percent to $158.5 million and sales edged up 3.2 percent to $1.7 billion on the strength of higher selling prices and the company's focus on higher value-added segments in both Europe and North America.
Both the consumer (car, light truck and motorcycle tires) and industrial (commercial vehicle tires and steel cord) business units reported higher sales during the period, but the consumer unit's operating income fell 9.4 percent while the industrial sector's profits improved by 14.9 percent.
Consumer and industrial sector sales rose 3.2 and 3.3 percent, respectively, to $1.18 billion and $519.1 million.
In consumer tires, Latin America posted a double-digit sales increase on the strength of original equipment business, while in Europe and North America the company struggled with falling replacement market demand.