PARIS (July 29, 2011)—Michelin's net income surged 32 percent to $960 million as sales jumped 21 percent to $14.5 billion for the first half, ended June 30.
Operating income rose 9.6 percent to $1.4 billion as higher selling prices offset the effects of increased raw materials costs. Michelin reported 12.6-percent higher unit volumes during the period.
Michelin said it continues to diligently pursue a pricing policy intended to pass on the increase in raw materials prices. Together, the price increases announced or implemented to date are expected to offset estimated additional full-year costs of nearly $2.6 million.
Worldwide demand for tires rose substantially in all regions, Michelin said. Following a sharp increase in the first quarter, growth slowed to a pace closer to long-term trends.
Replacement passenger tire demand in North America was up just 1 percent for the half, Michelin said, following a record tire sales in the first quarter, while OE tire demand increased 5 percent. Higher fuel prices in the second quarter and the resulting decrease in distances driven by U.S. motorists weighed on replacement demand at the end of the half. Market growth was driven by the recreational and commercial segments as well as by the high-performance tire segment (V and Z speed rating).
Replacement truck tire demand in North America rose 14 percent as freight tonnage returned to 2007 levels, while OE sales surged 66 percent, reflecting new vehicle purchases needed due to the high average age of tractor trucks, according to Michelin.