PARIS (Reuters) - Michelin vowed to deliver a further gain in operating profit this year despite challenging conditions in its main tire markets, as it posted better-than-expected results for 2018.
Buoyant sales of specialty tires for mining and agriculture drove a 0.3 percent increase in full-year group revenue to 22.03 billion euros ($24.9 billion), the French tire maker said - despite sharp declines in truck and car tire sales.
Sales to car manufacturers will fall further in 2019, Michelin predicted, offset by “modest growth” in replacement demand. With truck tire demand seen flat and specialty growth continuing, the company pledged to raise recurring operating profit before currency effects also expected to be positive.
“In a difficult economic environment, Michelin demonstrated its ability to increase operating income,” the company’s outgoing Chief Executive Jean-Dominique Senard said.
Trade jitters and a weakening global economic outlook have hit fourth-quarter results in the auto sector and beyond, focusing attention on earnings outlooks for 2019.
Recurring operating profit for 2018 edged 1.2 percent higher to 2.78 billion euros, Michelin said. Analysts had expected operating profit of 2.68 billion euros on revenue of 21.74, based on the median of eight estimates polled by Infront Data for Reuters.
Net income dipped 1.3 percent to 1.67 billion euros.
Earlier this month, rival tire maker Goodyear posted fourth-quarter results that missed analyst expectations, sending its shares lower.
Reporting by Gilles Guillaume; Additional reporting by Laurence Frost; Editing by Sudip Kar-Gupta and Mark Potter