MILAN, Italy (Nov. 11, 2010)—Pirelli Tyre S.p.A. reported measurable gains in operating and net income in the third quarter as sales nearly equaled those of the 2008 period.
Pre-tax operating income before restructuring charges jumped nearly 55 percent to $207.3 million as sales hit $1.52 billion. Net income more than quintupled to $52.6 million.
Pirelli attributed the earnings improvement to a decline in raw materials costs, the focus on price/mix, actions for greater competitiveness and a recovery in the market, accompanied by sales growth at higher rates than the market in all areas.
Revenues for the nine months ended Sept. 30 amounted to $4.32 billion, down 4.5 percent from the 2008 period. Pre-tax operating income for the year to date was up 1.2 percent to $558.8 million, improving the profit ratio a full point to 12.9 percent.
Pirelli reported sales in its consumer business rose 3.1 percent to $1.07 billion on improved replacement market demand and smaller-than-expected declines in OE sales. Sales for the nine-month period were down 4.5 percent to $3.08 billion.
Industrial business sales fell 12.2 percent in the quarter to $447.7 million and 16.7 percent for the year to date to $1.24 billion.
Pirelli said the industrial segment is more cyclical because it is linked to macro-economic performance, thereby accounting for lower tire and steel cord sales.