By David Pearson
PARIS--French tire maker Cie Generale des Etablissements
Michelin SCA said Wednesday the strong euro was largely responsible
for a 2.4% decline in its revenue for the first quarter of the year
despite increased tire sales.
Like other automotive companies with significant European
manufacturing operations, Michelin is suffering from the strength
of the single currency, which is eroding sales and earnings from
foreign operations when translated back into euros.
Michelin said its net sales fell 2.4% in the three months
through March 31 to 4.76 billion euros ($656.9 billion) despite a
3.4% rise in tire sales from recovering sales and production of
cars and trucks worldwide.
But Michelin, one of the world's leading tire and rubber
companies, said its first-quarter revenue would have been 4.6%
above the reported level had it not been for the euro, which
strengthened significantly against other currencies over the
three-month period.
The first-quarter figure was well below an average estimate of
EUR4.83 billion among a panel of 11 analysts polled by the
company.
The company reaffirmed its 2014 full-year guidance of a 3% rise
in its sales volumes, in line with the global market, as well as a
return on capital employed of more than 11% and cash flow of more
than EUR500 million.
It said it aims to improve its gross unit margin, while
preserving a positive balance between pricing policy and
raw-material costs.
Write to David Pearson at david.pearson@wsj.com
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