Michelin generated a 22.98 percent gain in value during the third quarter, proving that investors remained confident about the companys future following the accidental death of CEO Edouard Michelin May 26.
Michelin was 42.
Edouard Michelins successor as chief executive, Michel Rollier, has reaffirmed the French tire makers objectives. By 2010, the supplier wants to achieve an operating margin of 10 percent or more and a reduction in inventory levels to 16 percent of sales from 20 percent in 2005.
The companys operating margin was 8.8 percent last year. Rollier expects a 2006 operating profit of only 8 percent, due to soaring prices of rubber and other materials and the weak dollar against the euro. To combat the rising costs, Michelin announced in August it would charge automakers 6 percent to 8 percent more for passenger-car and light-truck tires starting October 1.
Record in sight for Continental
Continental gave shareholders a 14.48 percent return in the quarter, making it the second-best performer in the index of 24 suppliers.
Sales rose 6.2 percent to 7.2 billion in the first half and earnings before interest and taxes (EBIT) increased 5.3 percent to 722 million. The company said it is highly confident it will achieve new records for sales and EBIT in 2006 for the fifth consecutive year.
Meanwhile, the company continues to diversify. It concluded its purchase of Motorolas automotive electronics division on July 2.
It also expressed interest in acquiring Goodyears Engineered Products division, which specializes in non-tire rubber products.
Troubles at piston maker
Kolbenschmidt Pierburgs shareholder return dropped 15.23 percent during the quarter. Operating profit at the piston specialist slipped 16 percent to 57 million in the first half compared with 2005.
The company blamed its troubles on a rise in raw materials costs, which it can pass on to customers only after a delay.
You may e-mail Sylviane de Saint-Seine at [email protected]