MILAN, Italy (March 9, 2011)—Pirelli & C. S.p.A. reported double-digit growth in sales and earnings last year, including 30-plus-percent growth in North America, company executives said.
Pirelli's revenues rose 19.2 percent last year to $6.42 billion while pre-tax operating income jumped 56.8 percent to $540.1 million, thereby improving the earnings ratio two percentage points to 8.4 percent.
The net result was $5.6 million versus a net loss last year of about $30 million.
Pirelli attributed its revenue growth to higher unit volumes and improved price/mix effectiveness, especially toward premium products, including winter tires. Operating income benefited from pricing actions that compensated for increased production costs, in particular raw material costs as well as a progressive and strategic shift toward premium products, increased volumes and enhanced manufacturing efficiencies.
Pirelli Tyre S.p.A.'s results essentially mirrored those of its parent, especially because the unit now accounts for more than 98 percent of Pirelli & C.'s business following the divestiture last year of most of the firm's non-tire-related assets.
Pirelli Tyre reported an operating profit of $600.1 million on sales of $6.32 billion, including sales growth in North America to roughly $630 million. Pirelli registered growth of 16.7 percent in its consumer business (car, light truck and motorcycle tires) and 21.7 percent in its commercial sector (truck tires and steel cord).
Capital spending nearly doubled to $536.4 million to support expansion and modernization projects in Italy, China, Rumania and Latin America. Pirelli Tyre President Francesco Gori said the firm's new plant in Mexico should produce its first tires in the second quarter of 2012.
The board of directors has raised the firm's sales goal for fiscal 2011 nearly 8 percent to more than $7.2 billion.