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Michelin reaffirms goals despite operating profit dip
[PARIS] Michelin posted first-half sales and operating profit that narrowly missed market expectations while pledging that price increases would bolster earnings in the rest of the year and reaffirming the French tyre maker's 2017 goals.
Recurring operating profit fell 0.9 per cent to 1.39 billion euros (S$2.212 billion) on a 7.4 per cent increase in revenue to 11.06 billion. Profitability slipped to a 12.6 per cent operating margin from 13.7 per cent a year earlier.
The numbers fell short of the 1.43 billion euros in operating profit expected by analysts on sales of 11.1 billion, based on the median of seven estimates in an Inquiry Financial poll for Reuters.
Michelin's net income rose 12 per cent to 863 million euros.
Under increasing competitive pressure, Michelin is pursuing cost cuts to defend profitability without losing ground to low-cost rivals.
Its competitiveness plan generated 146 million euros in first-half savings towards a 300 million-euro full-year goal, keeping pace with inflation that wiped 142 million euros off earnings.