MILAN, Italy (April 21, 2009) — Pirelli Tyre suffered double-digit drops in earnings and sales in the quarter ended March 31, but management said the results were an improvement over the fourth quarter and are in line with the company's projections for the current fiscal year.
Pirelli Tyre reported a 74.7-percent drop in net income to $19.3 million and a 40.7-percent drop in pre-tax operating income to $80.6 million, while sales fell 13.9 percent to $1.22 billion.
Within Pirelli Tyre, the consumer business — car, light truck and motorcycle tires — reported a 42.2-percent drop in operating earnings to $55.3 million as sales fell 10.4 percent to $885.7 million. Pirelli attributed much of the decline to the sagging original equipment business and said market contraction in the replacement segement was more limited.
The industrial business — tires for industrial vehicles and steelcord — reported a 36.8-percent drop in operating income and a 22-percent decline in sales.
Pirelli said it was able to maintain “good levels of relative profitability” because of its strategic positioning, having 87 percent of its production in low-cost areas and 75 percent of sales in emerging markets.