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Michelin Hikes First-Half Operating Profits 11%
Michelin & Cie. reports that a cost-cutting program in Europe helped the tiremaker increase its operating income 11% to €1.4 billion ($1.6 billion) in January-June.
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Michelin & Cie. reports that a cost-cutting program in Europe helped the tiremaker increase its operating income 11% to €1.4 billion ($1.6 billion) in January-June. Net income rose 9% to €769 million ($846 million).
Demand for Michelin's original-equipment and replacement tires for cars and light trucks in the first half gained 2% and 3%, respectively. Sales of the company's commercial truck tires were flat to manufacturers and down 2% in the replacement market.
First-half revenue dropped 2%, to €10.3 billion ($11.3 billion). But cheaper raw materials and a richer sales mix boosted operating income by €115 million ($126 million).
Michelin says it expects to reduce costs by €1.2 billion ($1.3 billion) by the end of this year compared with 2012. The company—which predicts a “buoyant” tire market in China will offset slower growth in Europe and North America—reiterates previous guidance for improved operating earnings and at least €800 million in free cash flow in 2016.
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