Pirelli Q1 earnings up double-digits

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MILAN, Italy (May 9, 2014) — Pirelli & C. S.p.A.’s operating income rose 12.6 percent in the quarter ended March 31 on the positive effects of higher sales, improved pricing and product mix, efficiencies and lower raw materials costs.

Sales revenue fell 2.7 percent to $2.04 billion, on the negative effects of changes in the currency exchange rate. Sales volumes were up 3.8 percent, Pirelli said, including a 22-percent gain in shipments of premium products.

Net income jumped 26.1 percent to $125 million.

The results reflect growth in the main economic indicators, Pirelli said, including the the recovery of demand in Europe and the growing contribution to results of the premium segment.

In Europe, Pirelli’s consumer business registered sales growth of 10.2 percent, but that was offset to an extent by the industrial business, which suffered from a greater emphasis on emerging markets and the subsequent currency exchange problems.

Pirelli said earnings were boosted by about $38 million from efficiencies achieved through the company’s “de-complexity” initiatives and through rationalized use of raw materials.

It should be noted Pirelli’s sales might appear to be lower compared with a year-ago, but the discrepancy relates to the pending sale of the company’s steel cord business ($410 million annual sales volume) to Bekaert S.A. for $350 million.

These activities are now classified as “discontinued operations.”

Pirelli’s outlook for fiscal 2014 did not change.

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