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Michelin pledges 2019 profit gain despite market doubts

By Gilles Guillaume

PARIS (Reuters) - Michelin vowed to deliver a further gain in operating profit this year despite challenging conditions in its main tyre markets, as it posted better-than-expected results for 2018.

Buoyant sales of speciality tyres for mining and agriculture drove a 0.3 percent increase in full-year group revenue to 22.03 billion euros (19.31 billion pounds), the French tyre maker said - despite sharp declines in truck and car tyre sales.

Sales to car manufacturers will fall further in 2019, Michelin predicted, offset by "modest growth" in replacement demand. With truck tyre demand seen flat and speciality growth continuing, the company pledged to raise recurring operating profit before currency effects also expected to be positive.

"In a difficult economic environment, Michelin demonstrated its ability to increase operating income," the company's outgoing Chief Executive Jean-Dominique Senard said.

Trade jitters and a weakening global economic outlook have hit fourth-quarter results in the auto sector and beyond, focusing attention on earnings outlooks for 2019.

Recurring operating profit for 2018 edged 1.2 percent higher to 2.78 billion euros, Michelin said. Analysts had expected operating profit of 2.68 billion euros on revenue of 21.74, based on the median of eight estimates polled by Infront Data for Reuters.

Net income dipped 1.3 percent to 1.67 billion euros.

Earlier this month, rival tyre maker Goodyear posted fourth-quarter results that missed analyst expectations, sending its shares lower.



(Reporting by Gilles Guillaume; Additional reporting by Laurence Frost; Editing by Sudip Kar-Gupta and Mark Potter)