MILAN (Reuters) -Italy’s Pirelli said on Tuesday its operating profit grew 35% in the first quarter, topping estimates, despite an economic outlook for this year that is being darkened by geopolitical tensions, inflation and a lockdown in China.
The manufacturer of tyres for Formula One and high-end carmakers such as BMW and Audi said its adjusted earnings before interest and tax (EBIT) stood at 228.5 million euros ($240.8 million) in the January-March period, exceeding a company-provided analyst consensus of 217 million euros.
“Geopolitical tensions and falling demand in China due to lockdown measures are holding back the prospects for global economic growth,” the company said in a statement.
This led the company to trim its forecast for this year’s margin on its adjusted EBIT to around 15%, after previously guiding between around 16%-16.5%.
However Pirelli slightly raised its forecast for its full-year revenues, allowing the company to confirm a target for an adjusted EBIT of 890 million euros this year, a figure it first gave three month ago.
Pirelli said the increasing inflation and raw material costs were more than offset by price-mix and efficiencies.
Further actions were being planned to counter the effects of the war in Ukraine and the drop in Chinese demand, which were partly offset by a better business performance expected in North and South America. ($1 = 0.9489 euros)
(Reporting by Giulio PiovaccariEditing by Keith WeirEditing by Keith Weir)
