Michelin Revenue up 5.5%

Michelin’s revenue during the first quarter of 2007 rose 5.5 per cent thanks to higher prices and demand from commercial vehicle manufacturers. The tyremaker reported that sales during the quarter came to 4.2 billion euros, compared with 3.98 billion euros a year earlier. The company is sticking to its forecast of a “tangible increase” in full-year profit as a proportion of sales.

In February Michelin affirmed its goal of a margin of 10 per cent by 2010 (compared with 8.2 per cent during 2006), and stated it will reduce costs by as much as 1.7 billion euros by 2010. The company plans to cut spending on purchasing and manufacturing.

According to the company, higher prices and changes in the type of tyres purchased added 4.4 per cent to Michelin’s sales in the quarter. The company had been expected to report sales of 4.15 billion euros.

“Tyre markets were dynamic in all regions except for North America, which is still affected by a partial economic slowdown and a further round of fuel price increases.” Michelin said, adding that its profit projection assumes a natural rubber price similar to that in 2006. “Should a strong hike be recorded in mid-year 2007, the group would need to revise its assumptions.”

Sales of truck tyres rose 5.3 per cent to 1.36 billion euros in the quarter. Passenger tyre sales increased 3.5 per cent to 2.25 billion euros while specialty tyre sales, including construction and aircraft tyres, leapt 15 percent to 590 million euros. The French tyremaker does not release quarterly profit figures, and is scheduled to publish its first-half earnings on July 27.