By Denna Bowman
Pirelli shares have risen following the tyres manufacturers announcement that its 2011 full year results soared 16.6 per cent on the previous year.
The world’s fifth largest tyres company increased its operating profit margin forecast for 2012, which prompted a sharp rise in its share price.
Shares in the tyremaker, one of the world’s best known automotive industry brands, rose nearly 10 per cent on the improved outlook and had to be suspended from trading, according to a report in the Financial Times.
Marco Tronchetti Provera, chairman and chief executive of Pirelli, said: “The improvement was achieved notwithstanding the slowdown of the general macroeconomic scenario, especially in western economies.
“This proved the effectiveness of Pirelli’s strategy with its focus on the premium segment and the strengthening of its manufacturing presence in rapidly growing economies.”
Industry analysts were surprised by Pirelli’s decision to raise its 2012 so high and had expected a more modest 8-10 per cent hike.
Morgan Stanley explained: “What surprised us positively was 2012 guidance: it was increased to greater than 12 per cent margin albeit on slightly lower targeted revenue.”