Continental A.G. and Group Michelin both reported higher sales during the first quarter.
Continental posted a 34.5-percent rise in pre-tax earnings for the first quarter on 5.8-percent higher sales, prompting Chairman Manfred Wennemer to predict improvements in sales and operating earnings for 2004 as a whole.
Considering that the global automotive industry remains restrained, ``this demonstrates our strong position among international competition,'' Mr. Wennemer said. The earnings improvement would be before taking into account ``potential restructuring costs in North America,'' he said.
Pre-tax earnings increased to $308.4 million while sales hit $3.73 billion, raising the earnings/sales ratio nearly two points to 8.3 percent.
The passenger/light truck tire division reported 2.2-percent higher sales revenues, as higher global original equipment sales and European aftermarket sales offset lower sales volumes in North America, where the company again was in the red. The unit's operating result was up 37.3 percent to $71 million as good results in Europe ``more than made up'' for the losses in North America, where Conti blamed the higher prices of materials and additional social welfare expense for its earnings troubles.
On the commercial tire side, Conti reported an 18.2-percent increase in pre-tax earnings as sales rose 20 percent, boosted by the first-time inclusion of results from Continental Sime Tyre in Malaysia. Pre-tax earnings hit $16.3 million and sales rose to $424.1 million. Volumes sold rose 9 percent in Europe and 5 percent in North America, where earnings were affected adversely by higher costs.
Michelin posted 3.9-percent better sales in the first quarter of 2004 as the volume of tires sold was up 7.6 percent, but swings in the currency exchange rates held the revenue gain down to only about half of that.
For the full year, Michelin is forecasting growth somewhat better than initially anticipated, but cautioned that first-quarter growth was aided by some exceptional circumstances in Europe and North America and that rising raw material prices continue to affect earnings.
Michelin did not disclose earnings for the quarter at this time.
Worldwide sales rose to $4.62 billion, with most of the growth coming in the truck tire and ``other'' businesses, Michelin said. The latter includes the company's holdings in retailing in Europe and the U.S.
In North America, Michelin said it gained share in the replacement passenger/light truck tire market compared with the first quarter of 2003 based on the ``strong'' growth of its Michelin, BFGoodrich and Uniroyal flag brands. Overall, the market was up 5.8 percent, with flag brands outperforming private and associate brands, Michelin said.