MILAN, Italy (May 16, 2016) — Pirelli & C. S.p.A. reported a 1.7-percent drop in operating income for the quarter ended March 31 on 0.4-percent lower sales revenue, adjusting for the exclusion of Pirelli's Venezuelan operations, which were deconsolidated.
Revenue grew to $1.63 billion despite a 0.8-percent drop in unit volume sold. Pirelli attributed the increased revenue to a significant improvement of the price/mix component, greater sales in the replacement channels and the diverse geographic and product mix.
The unit volume change reflected several swings in verious segements, Pirelli reported. Sales of premium performance tires grew 11.7 percent and now account for more than two-thirds of the consumer business unit's revenue, or nearly $890 million in the quarter, Pirelli said.
By contrast, unit sales in the industrial business unit (truck, farm and industrial tires) fell 10.1 percent, reflecting the contracting Latin American market and the slowing Chinese market. Revenue fell 15.3 percent to $306 million.
At the geographic level, profitability improved in Europe, Asia/Pacific and NAFTA thanks to significant growth in the premium segment, Pirelli said, led by Asia/Pacific.
Pirelli said the operating earnings also were affected by about $13.5 million in non-recurring charges related to rationalization costs attributable to the integration process involving Pirelli's Industrial segment with the industrial assets of China National Rubber Corp.