Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Pirelli Stock Declines as Forecast Scaled Back on Russia

Aug. 6 (Bloomberg) -- Pirelli SpA, Europe’s third-largest tiremaker, fell the most in almost four months after cutting its profit target for this year because of a weaker Russian market.

Pirelli dropped as much as 4.4 percent to 9.58 euros, the steepest decline since April 8, and was trading down 3.3 percent at 11:02 a.m. in Milan. Volume was 93 percent of the three-month daily average. The stock has gained 12 percent this year, valuing the company at 4.69 billion euros ($6.22 billion).

Earnings before interest and taxes in 2013 will reach 810 million euros, the lower end of a previously forecast range of 810 million to 850 million euros, the Milan-based manufacturer said in a statement yesterday. The economy and “market dynamics” are weighing on earnings, with the Ebit margin at the Russian business now seen as “slightly negative” versus an earlier prediction of “mid-single-digit growth.”

The maker of high-performance tires also narrowed its global revenue forecast to 6.3 billion to 6.35 billion euros from an earlier expectation of as much as 6.4 billion euros.

The forecast is a “clear disappointment” amid Pirelli’s prediction that the benefit of lower raw-material costs will be consumed by higher spending on opening factories in Mexico and Russia and on marketing, Gaetan Toulemonde, a Paris-based analyst at Deutsche Bank AG with a hold recommendation on the stock, wrote in a report to investors today.

To contact the reporter on this story: Dorothee Tschampa in Frankfurt at dtschampa@bloomberg.net

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

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.