Bloomberg News

Michelin Quarterly Sales Gain 11% on U.S. Rebound, Winter Tires

October 26, 2011

Oct. 26 (Bloomberg) -- Michelin & Cie., the world’s second- largest tiremaker, said third-quarter revenue rose 11 percent, spurred by a rebound in demand from U.S. automakers and strong sales of its winter tires in Europe.

Sales advanced to 5.14 billion euros ($7.1 billion) from 4.65 billion euros a year earlier, the Clermont-Ferrand, France- based company said today in a statement.

Michelin reiterated that sales volumes should increase 8 percent during the full year. While free cash flow will be “temporarily negative” because of higher raw-material costs, operating profit should be “substantially higher,” it added.

Michelin raised the 2011 volume target in July as first- half profit beat estimates. Chief Executive Officer Michel Rollier said in September that he’s ready to cut output and jobs if Europe’s sovereign-debt crisis triggers a broader slump.

Passenger-car and light-truck tire revenue rose 5.9 percent to 2.66 billion euros in the quarter, with sales from heavy trucks up 13 percent to 1.7 billion euros. Specialty tires for airplanes and earthmovers, Michelin’s smallest and most profitable division, recorded a 24 percent surge.

Michelin, which employs 111,000 people worldwide according to its website, is investing 75 million euros in a Chinese venture with Double Coin Holdings Ltd. and Shanghai Huayi Group Co. as it pushes expansion in emerging markets to reduce dependence on Europe and North America.

The French company ranks behind Bridgestone Corp. in global production.

--Editor: Chris Jasper.

To contact the reporter on this story: Alex Webb in Frankfurt awebb25@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net


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