PARIS (Oct. 22, 2003) — Group Michelin expects its fiscal 2003 operating earnings to fall slightly short of its 2002 performance because of double-digit increases in raw material costs in the past 12 to 15 months.
Michelin did not project sales for the fiscal year but said sales for the nine months through Sept. 30 were down 4.6 percent, to $12.4 billion, as exchange rate fluctuations more than offset gains in volumes, pricing and product mix. Tonnage sold for the nine-month period was up 3.1 percent based on strong truck tire sales, primarily in Europe, the firm said.
In the third quarter, sales fell 1.7 percent to $4.2 billion with exchange rates offsetting volume and pricing gains.
In North America, Michelin said its passenger car/light truck tire sales were up 0.6 percent in the quarter but down 1.3 percent for the year-to-date, with truck tire sales up 2.5 percent for the quarter and 3.3 percent for January-September period.
Michelin said it lost market share in the mass market and H-rated segments but anticipated regaining some of this with the September launch of its HydroEdge and latest generation MXVH4 lines. In truck tires, Michelin said it outperformed the market in both new tires and retreads.
Overall, Michelin said it expects increased raw materials costs to have a negative impact of $350 million on its operating earnings this year. The net effect will be to leave the company's operating earnings/sales ratio at slightly below the 7.8 percent achieved in fiscal 2002.