MILAN, Italy—Pirelli & C. S.p.A. reported double-digit growth in sales and earnings for the quarter ended March 31, but the Italian tire maker has downgraded its earnings outlook for the fiscal year due to rising inflation and raw material costs,
Pirelli's first-quarter operating income rose 34.4 percent to $256.7 million on 22.2 percent higher sales of $1.71 billion, yielding a slightly higher operating ratio of 15 percent. Net income more than doubled to $123.3 million.
Pirelli attributed the earnings improvement to the positive impact of the price/mix component and operating efficiencies, which more than offset the strong impact of raw materials prices and inflation.
For the full fiscal year, however, Pirelli said it anticipates the negative effects of increasing inflation and raw material costs will more than offset the price/mix and efficiencies. Also impacting the bottom line will be the impact of Russia's war with Ukraine and the related international sanctions as well as a drop in demand in China fueled by the resurgence in COVID-19.