“The introduction of new company software in January has turned Liqui Moly into a permanent building site”, according to a published apology from company officials. The system that was supposed to simplify processes and reduce costs for the oil and additive specialist, has had the opposite effect and negatively affected the half-year results. “If we were listed on the stock exchange, I would have to issue a profit warning,” said CEO Ernst Prost.
Goodyear’s share price fell 12 per cent after the company published a trading update with the US stock market Securities and Exchange Commission ahead of Detroit Motor Show presentation scheduled for 15-16 January 2019.
Nokian Tyres’ management has issued a profit warning stating that second half revenues are likely to be lower than expected. Third quarter sales are said to be stable year-on-year, which are somewhat lower than some analysts’ projections (Deutsche Bank for example had said +10 per cent).
Online tyre dealer Delticom has published its 9-monthly report for 2012. In a troubled market environment the company recognised revenues of €280.4 million in 9M 12, a fall of -5.8 per cent year-on year.
Earnings before interest and taxes (EBIT) decreased in the reporting period by 37.9 per cent to €17.5 million (9M 11: €28.2 million), primarily due to higher fix costs. This translates into an EBIT margin (EBIT in percent of revenues) of 6.2 per cent (9M 11: 9.5 per cent). Third quarter EBIT saw a decline of 55.0 per cent, from prior-year's €9.5 million to €4.3 million. The quarterly EBIT margin was 4.9 per cent (Q3 11: 9.5 per cent).
Michelin has reported sales of 16.142 billion euros in the first nine months. The figure, which represents a 6 per cent increase compared with the same period last year, comes despite slow demand and continued pressure in the economic environment especially in mature markets. However, despite the increase, sales volumes were down 6.7 per cent, with the overall improvement being explained by product mix and raw materials-related price increases.
Delticom has reported revenues of 280.4 million euros in the first three quarters of 2012, down some 5.8 per cent compared with the previous year. The preliminary results show that pre-tax profits (EBIT) amounted to 17.5 million euros, which suggests this figure fell by around a third compared with last eyar. By comparison, in the first nine months of 2011 revenues increased by 15.8 per cent to 297.7 million euros and EBIT by 23.3 per cent to 28.2 million euros. As a result of the “challenging market environment” Delticom warned investors that it is scaling back its EBIT goal for the current financial year to 7 – 8 per cent.
With tyre demand said to be down between 2 and four per cent, financial analysts at Deutsche Bank confidently reported that the tyre companies under its coverage “should record strong results in the third quarter due to a still positive pricing environment”. Or in other words because manufacturers are said to be doing their best to maintain prices. And this is said to be coupled with a reported raw material tailwind.
Delticom issue a profit warning (19 July 2012) after revenues and pre-tax profits (EBIT) came in below expectations. As a result the company reduced its full-year growth target from +10 per cent to +5 per cent year-on-year and stated that an EBIT margin above 9 per cent (compared with 6.9 per cent in the first half of 2012 and 9.4 per cent in the first half of 2011) is only attainable in the event of a good winter tyre season prompted by wintery weather.
Bridgestone executives have aired a degree of caution relating to the tyre major’s earnings outlook for this year. According to various news sources Bridgestone Corp.'s chief financial officer on suggested the impact of the euro-zone debt crisis is affecting demand, which in turn is weighing on its business.
Continental AG says it expects pre-tax profits (EBIT) of about 8.5 per cent this year, despite an earlier prediction of 9.3 per cent. The company, which recently gained a new leading shareholder – ball bearing maker Schaeffler Group – put the profit warning down to the “substantial worsening of the economic environment on the vehicle markets in North America and Europe in the third quarter and the unchanged high burdens from increased raw material cost.” The company maintained its 2008 sales projection of 26.4 billion euros.
Financial analysts at Morgan Stanley have downgraded Michelin stock to “underweight” and predicted Michelin will make a profit warning when it announces its first half 2008 results on 30 July. “We are double-downgrading Michelin…This year’s sharp rise in raw material costs may be the immediate source of pressure on earnings, but we think the bigger risk going forward is slowing OE and replacement demand,” the analysts explained. Describing the premium tyre manufacturers’ pricing discipline as “remarkable,” the bank predicted pre-tax (EBIT) profit margins would still fall to 7.3 per cent, near the company’s historical average, in 2008.
Explaining the reason for their rating downgrade, the Morgan Stanley analysts suggested Michelin’s truck and speciality tyre segment strengths could be weakness in a tough market for vehicle makers: “With 50 per cent of [Michelin’s] revenues coming from truck and speciality tyres, Michelin’s fortunes are tied to the industrial cycle more than any other tyre company we cover globally.” In addition, according to the report, around 30 per cent of revenue and 20 per cent of Michelin’s profits are said to be generated in North America where recent tyre demand has been particularly weak.
(Akron/Tire Review – FT) Groupe Michelin is aiming to lower its production costs in Europe and North America by an estimated 20 per cent as it clamps down on inefficient development and manufacturing processes ahead of next year’s expected sharp downturn in the global truck market.
Yokohama Rubber Co., Ltd., posted an 11 per cent increase in net sales, to 106.8 billion yen (£486.7 million), in the three months ended 30 June. The increase resulted primarily from robust growth in overseas tyre business, according to the company. Tire sales also benefited from increased shipments to automakers in Japan. However, the rising prices for raw materials offset the sales growth in the Tire Group, and operating income in the group declined 64.6 per cent, to 1 billion yen (£4.56 million).
Michelin has reassured market watchers that it will be able to achieve an operating margin of around 8 per cent for the full year, following the successful achievement of the same figure (equivalent to 644.7 million euros) in the first half of 2006. The company had previously predicted that it would achieve an operating margin of 8.8 per cent. Michelin achieved first half net sales of 8,023 million euros, up 7.1 per cent compared with the same period last year.
After issuing a profit warning last week, General Motors has suggested that it may phase out one of its weaker brands if sales fail to meet projections, company vice chairman Bob Lutz said on Wednesday. A Detroit News report described GM’s Buick and Pontiac as “damaged brands” due to lack of investment over the years, something that GM is working to correct with an array of new vehicles coming to market, Mr Lutz told a Morgan Stanley automotive conference in New York.
But if some of its brands fail to meet sales projections, “then we would have to take a look at a phase-out. I hope we don’t have to do that. What we’ve got to do is keep the brands we’ve got.” According to the report sales for both Pontiac and Buick have lagged in recent years.