PARIS—Michelin's net income fell 44.5 percent to $654 million on 1.5-percent lower sales of $13.4 billion for the six months ended June 30 because of lower volumes, a less-advantageous price/mix and currency effects.
The company said its European business primarily was responsible for the sales decline.
The tire maker's operating income fell 12.7 percent in the period, to $1.52 billion, for an earnings ratio of 11.3 percent or one full percentage point lower.
Michelin attributed the sales drop to lower volumes (1.5 percentage points of the decline), a less advantageous price/mix (2.3 percent) and currency effects (1.4 percent). The primary cause of the lower volumes was Europe, Michelin said, where replacement OE and consumer tire demand was off 3 and 4 percent, respectively. but
The company is expecting "modest growth" in market demand in the second half along with more benefits from lower raw materials costs.
Michelin said consumer replacement demand in North America ended the first half unchanged from the first half of 2012, with improved second quarter shipments offsetting a 2-percent drop in the first quarter. North American original equipment tire demand was up 4 percent in the half, buoyed by the launch of new models and continued strong new car sales.
Truck tire demand in North America slipped 2 percent for the period, with the first quarter malaise overwhelming a 2-percent upturn in the second quarter, led by an improving freight market.