Michelin records operating profit drop in 2013 image

Michelin & Cie., Europe’s largest tiremaker, announced in a statement its operating profit slid 7.8 % last year to 2.23 billion euros, but added it’s keeping its optimistic 2015 forecast.

The tiremaker decided to stick to the 2015 earnings targets because it thinks first-half spending on supplies like rubber would fall and the full year volume for 2014 would rise.
Michelin’s shares went up and reached a four-month high after it announced it’s committed to the “margin discipline, which preserves a positive balance between pricing policy and raw-materials costs.” According to Chief Executive Officer Jean-Dominique Senard, the company would also manage to reach its 1 billion-euro ($1.37 billion) cost-savings goal for 2016.

“The group doesn’t have any debt now,” Senard said. “It’s a historic event. This gives us greater flexibility,” and the company is open to acquisitions, “probably in Asia.”

The tiremaker’s stock gained 2.2 % to 82.78 euros, the highest intraday since Oct. 22 and was trading up 1.7 % at 10:10 a.m. in Paris. The company’s value now stands at 15.3 billion euros as the stock has surged 13 % in 2013. Michelin is reducing costs by cutting jobs in Europe, while building new plants in the US, Brazil, China and India.
Via Bloomberg