Pirelli Q3 earnings off slightly on 6% lower sales

MILAN, Italy—Pirelli & C. S.p.A.'s pre-tax operating income dropped slightly in the quarter ended Sept. 30 on 6.2-percent lower sales revenue, but Pirelli management nonetheless revised the firm's full year outlook up slightly.

Pre-tax operating earnings (adjusted EBIT) fell 2.5 percent in the quarter to $288 million, on 6.2-percent lower sales of $1.87 billion, Pirelli reported. As a result, the operating ratio improved slightly, to 15.4 percent.

Pirelli cited the impact of lower volumes, operational costs and currency-exchange effects for the earnings decline. Price/mix, operational efficiencies and reduced raw-materials costs offset to a degree the negatives.

The lower revenue figure, it noted, reflected a 4.6-percent drop in unit sales volumes, in part due to the decline in sales of 17-inch and lower rim-diameter tires.

For the nine-month period, the pre-tax operating income was up 3.4 percent over the comparable 2022 period to $1.12 billion on 2.5-percent higher revenue of $5.6 billion, yielding an operating ratio of 20 percent.

The revenue increase was achieved despite a 3-percent drop in unit volumes, Pirelli said, citing an improved price/mix component, including price increases implemented in the fourth quarter of fiscal 2022 and first quarter of 2023.

Net income rose 14.5 percent to $446.7 million.

North America was the only region to generate significant growth during the period, with revenue up 10.7 percent for the nine months to $1.44 billion, or 23.7 percent of Pirelli's global sales.

By comparison, Pirelli's business in Europe declined 0.3 percent, was flat in Asia and rose 0.1 percent in Latin America and 1.2 percent in Russia and eastern Europe.

For the full fiscal year, Pirelli said it expects revenues to be up slightly over 2022 despite 2-percent lower unit sales.