May 14, 2018 / 6:29 PM / a few seconds ago

Italy's Pirelli sticks to profit targets as first quarter tops consensus

MILAN (Reuters) - Italy’s Pirelli (PIRC.MI) stuck to its full-year profit outlook after operating income in the first three months rose 4.5 percent, lifted by strong demand for high-margin premium tyres.

FILE PHOTO: A tyre is pictured in a tyre specialist center in Turin, March 18, 2014. REUTERS/Giorgio Perottino/File Photo

Pirelli, which makes tyres for Formula One racing teams and premium automakers like BMW (BMWG.DE) and Audi (NSUG.DE), said adjusted operating profit before charges and start-up costs to March were 229.4 million euros ($274.7 million), just above an analyst consensus provided by the company of 224 million euros.

“We confirm the outlook for 2018 and our expectation to outperform the market in the premium segment,” Chairman and CEO Marco Tronchetti Provera said in a conference call.

In the first quarter, sales fell 2.2 percent to 1.31 billion euros, in line with expectations, hit by currency effects. Excluding that impact, revenue rose 5.7 percent.

Pirelli slightly lowered its forecast for 2018 sales volumes after accelerating its shift away from the less profitable standard tyre segment.

    It now expects revenues to grow around 4 percent this year, down from a previous guidance of at least 6 percent growth.

    Pirelli, which hived off its less profitable industrial unit as part of a 2015 takeover by China National Chemical (ChemChina) [CNNCC.UL], has been focusing on high-end tyres in recent years to boost margins.

    The group re-listed on the Milan bourse in October 2017, two years after it was taken over by ChemChina.

    Besides the Chinese conglomerate, other investors in the tyre maker include Tronchetti Provera and banks UniCredit (CRDI.MI) and Intesa Sanpaolo (ISP.MI).

    Reporting by Stefano Rebaudo; Editing by Edmund Blair

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