Analysts: Michelin results ‘impressive’
Michelin’s EBIT result of 1.3 billion euros beat market expectations by a huge 14 per cent, according to financial analysts. At the same time the company also announced a virtually unprecedented margin of 27 per cent in its Specialty Tyre division.
However, it wasn’t all sunshine. Bankers at Morgan Stanley highlighted the fact that although Michelin’s free cash flow worked out at 7 million euros (ahead of the 26 million euros expected by bankers), this includes the 100 million euros or more generated by the sale of a Paris building. Therefore they suggested underlying free cash flow was actually around -100 million euros.
Nevertheless consensus expectations are expected to increase 5-10 per cent for the company’s full-year performance, reflecting increased confidence. Michelin shares rocketed up 7.2 per cent, outperforming the STOXX auto index and hitting their highest level since early May after the financial results were published on 27 July.