MILAN, Italy (May 6, 2010)—Pirelli & C. S.p.A. closed the quarter ended March 31 with “significantly improved operating indicators,” nearly doubling its pre-tax earnings and boosting sales by 16.2 percent.
The positive first quarter performance prompted Pirelli management to forecast additional sales growth for the fiscal year of about 4 percent over earlier projections, to nearly $7 billion, and an operating earnings margin of at least 6.5 percent.
Pirelli's operating income in the quarter of $127 million represents 7.6 percent of sales, a three percentage point gain over the 2009 period. Sales climbed to $1.68 billion and net income shot up to $53.9 million.
Pirelli's Tire Business Staff Reported 19.8-percent higher sales of $1.54 billion and 66-percent better operating income of $132.2 million.
The gains resulted from higher demand in all of Pirelli's geographical areas and in all channels and segments, the company said.
Pirelli experienced rising raw materials costs, in particular for natural rubber, during the period, but they were softened by reducing stock. The effects of the increasing costs will be felt starting in the second quarter, the company said.
Pirelli's consumer business (car/light truck and motorcycle tires) reported 16.5-percent sales growth to $1.08 billion, with gains in both the OE and replacement channels. The commercial business (tires for commercial vehicles and steelcord) reported 28.4-percent sales growth to $455.8 million.