French tire maker Michelin (MGDDF.PK,MGDDY.PK), Monday said its first-quarter sales dropped over 8 percent hurt largely by weak sales of car and truck tires in Europe, as well as disappointing performance from North America.
Michelin's first-quarter revenues declined 8.1 percent to 4.88 billion euros from 5.30 billion euros in the prior-year quarter.
Passenger car and light truck tire sales declined 6.5 percent to 2.58 billion euros from 2.76 billion euros last year. In Europe, tire demand contracted by 11 percent, while North America, Asia and South America volumes improved 1, 5 and 7 percent, respectively.
Truck tire sales dropped 7.9 percent to 1.48 billion euros from 1.60 billion euros last year. The company said markets in Europe remained weak as volumes declined 3 percent, with truck registrations in the Western Europe declining, but partially offset by buoyant demand in Eastern Europe. North American volumes were down 12 percent as economic and tax uncertainties weighed on new truck orders.
Michelin said revenue from specialty tire business, comprising earthmover, agricultural, and aircraft tires, plunged 13 percent to 818 million euros, reflecting 6.9 percent drop in volumes caused by weaker demand in the Infrastructure and the OE Earthmover and Agricultural segments.
Moving ahead, Michelin continues to expect stable volumes in 2013, amidst a market environment that is weak in mature regions and expanding in the new markets.
Michelin affirmed its objectives for 2013, when it expects to report stable operating income before non-recurring items, a more than 10 percent return on capital employed and positive free cash flow.
Michelin last traded at $79.59, on the OTC markets.
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