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Pirelli in 1Q: profits drop 41.6%

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Pirelli & Cie SpA posted consolidated net income of 72.1 million euros on net sales of 1.5 billion euros for its first quarter ended March 31, 2013. That compares to income of 123.6 million euros on sales of more than 1.5 billion euros for the same period last year.

Based on the exchange rate on March 31, 2013, Pirelli recorded net income of $92.4 million on net sales of nearly $2 billion for the first quarter of fiscal 2013. Its income-to-sales ratio was 4.7%, down from 7.9% in 1Q 2012.

Operating income was down 15.5%, from 212.7 million euros to 179.8 million euros ($230.5 million).

"The first quarter of 2013 was characterized by an economic scenario still strongly influenced by the crisis affecting Europe, where the demand for goods and services continues to shrink," says Pirelli.

"In total, the European market has undergone a decline compared with 2012, which is more marked in the consumer segment, where the replacement channel fell by 11%. In this channel, the premium segment was also impacted and saw a decline, although not as steep as the overall figure."

Tire sales account for 99.3% of total sales. Quarter to quarter, they were down 15% in Europe, 4.5% in the NAFTA region, and 2% in the MEA (Middle East and Africa). Tire sales were up 27% in Russia, 14% in the Asia Pacific region and 12% in South America.

South America accounts for 35% of Pirelli's tire sales, followed by Europe (33%) and NAFTA (11%).

"In the NAFTA area, where there was a slowdown in tire demand, the premium performance was... stable compared with the first quarter of last year," says Pirelli.

Sales were down 3% in the consumer business segment, which makes up 73.1% of total tire sales.

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