Pirelli Tyre Revenues Expected to Increase in Fourth Quarter

Pirelli & C SpA is scheduled to reports its fourth quarter results and 2010-11 guidance on March 10. Deutsche Bank Equity Research anticipates that in the fourth quarter Pirelli Tyre revenues should benefit from a volume increase (Deutsche Bank estimates a 15% increase) compared with decreases in the previous nine months, a negative price mix (a price mix of -2% versus +6.9% in Q1, +5.6% in Q2 and +4.7% in Q3) which Deutsche Bank believes has allowed Pirelli to gain market share on the continued discipline of manufacturers, and a 2 per cent positive foreign exchange impact. Furthermore, says Deutsche Bank, margins should benefit form low raw material prices, as the large price increases for these commodities took place in 2010.

The bank anticipates consolidated sales of 1,112 million euros, 46 per cent more year-on-year after more than 20 per cent decline in the first half of the year, and organic debit of 80 million euros. Net income is expected to be 1.8 million euros, as compared to a loss of 296 million euros in the fourth quarter of 2008. Restructuring costs during the quarter should be 45 million euros, as opposed to 95 million euros in the final quarter of 2008.