Michelin lifts profit on pricing, lower material costs

PARIS Tue Feb 12, 2013 1:07am EST

PARIS Feb 12 (Reuters) - Michelin, the world's second-largest tyremaker, said strong pricing and lower raw-material costs helped lift profit in 2012, pledging to hold onto gains this year even as sales volumes remain broadly flat.

Net income rose 7.5 percent to 1.57 billion euros ($2.1 billion) on a 3.6 percent revenue increase to 21.47 billion, the company said at a briefing for reporters in Paris on Tuesday.

The French company, whose tyres equip vehicles ranging from bicycles to airliners, said truck and specialty tyres - for farming and mining equipment - largely drove the earnings gain.

Car tyre sales were weighed down by a "collapse in new car registrations" in Europe, Michelin said in a statement.

Vehicle sales hit a 17-year low in the region last year, dragging Michelin's global sales volume to a 6.4 percent decline.

Analysts had expected net income of 1.64 billion euros on revenue of 21.65 billion, according to Thomson Reuters I/B/E/S.

Operating income rose 25 percent to 2.42 billion euros, excluding one-time gains or losses, raising the operating margin to 11.3 percent from 9.4 percent, Michelin said.

The company forecast "stable" operating income for 2013 and broadly flat sales volumes.

Pricing remained strong, it said, also forecasting a first-half gain of 350-400 million euros from ongoing price declines for its rubber, steel and oil-derived manufacturing inputs.

Michelin reiterated its medium-term operating profit goal of 2.9 billion euros for 2015.

The French tyremaker, which ranks behind Bridgestone of Japan in global sales, is adding the equivalent of a new plant each year to harness growth in emerging markets. ($1 = 0.7474 euros) (Reporting by Laurence Frost; Editing by James Regan)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.