MILAN — Pirelli & C. S.p.A. posted higher sales and earnings for the quarter ended March 31, aided by an improved price/mix component and cost-reduction plans.
The Italian tire maker's adjusted pre-tax operating income rose 9.5% to $358.6 million on 0.3% higher sales of $1.49 billion. Pirelli attributed the growth partially to a 7.7% improvement of price/mix, which offset higher materials costs, negative exchange rate impact and volume declines.
During the period, Pirelli achieved roughly $34 million in industrial-efficiency and cost-reduction measures.
In terms of sales, Pirelli registered a 7.3% increase in "high-value" revenue, which essentially offset a 12.1% decline in revenue from "standard" tires.
Overall, unit volumes fell 6.5%, which resulted from a 16.6% drop in standard tire sales versus a 4.5% gain in high-value products, Pirelli said.
Regarding headwinds, Pirelli reported a year-on-year rise of nearly $31 million in raw materials prices and $2.4 million in negative currency impact.
Among Pirelli's geographic regions, North America topped the list with 10.8% revenue growth to $306.6 million, a gain the company attributed to rising market-share in the all-season and specialties (18-inch and larger rim diameters) categories.
Profitability in North America improved by more than two percentage points (to 20%-plus), due to the increases in high value-added products, cost-efficiency efforts and the strengthening U.S. dollar.
For the full fiscal year, Pirelli scaled back its sales expectation to revenue growth of 3% to 4% (versus 4% to 5% previously) because of "prolonged weakness" in global OE demand and a more rapid decline in demand for standard products that previously considered.