Pirelli, the Italian auto supplier, has announced an upgrade to its revenue and margin outlook for the year, despite lower sales and operating profit in the third quarter. The company reported third-quarter revenue of €1.72 billion ($1.84 billion), slightly lower than the estimated revenue of €1.73 billion. However, sales for the first nine months increased by 2.5% to €5.16 billion.
Pirelli now expects its revenue for the year to reach around €6.6 billion, up from its previous target of around €6.5 billion. The company attributed this positive outlook to improved price and product mix, which contributed to a 3.8% rise in adjusted earnings before interest and taxes (EBIT) for the first nine months, amounting to €782.5 million.
Furthermore, Pirelli’s net profit in the third quarter surged by 33% to €168.4 million, driven by a tax benefit and improved operating performance. The company’s net profit for the first nine months also saw a significant increase of 14.4% to €411 million.
Despite facing a cash outflow before dividends of €367.7 million in the nine-month period, Pirelli managed to improve its net cash flow before dividends to €167.2 million, compared to €140.5 million in the previous year.
Looking ahead, Pirelli is now targeting an adjusted EBIT margin of 15%, which aligns with the high end of its previous target range of 14.5%-15%. The company aims to generate a net cash flow before dividends between €450 million and €470 million for the year, an improvement from its earlier target range of between €440 million and €470 million.