Michelin on Oct. 18 revised its earnings forecast for 2018 due to a significant decline in passenger car and light truck and truck tire markets late in the third quarter.
The French tire maker now expects a slight increase in volumes over the full year and a year-over-year increase of at least €200 million in operating income from recurring activities. It also expects over €1.10 billion in structural free cash flow.
In July, the company said it expected sales volume growth in line with global market trends.
For 2019, Michelin expects a €150 million year-over-year increase in EBIT from its latest acquisitions, particularly its pending acquisition of Canada's Camso Inc. The company expects a 1.5% growth in the passenger car and light truck tire market in 2019, with a 10% gain in the 18‑inch and larger segment and a slight rise in the Chinese market. The specialty businesses division is expected to rise 4% to 5%.
During the third quarter, Michelin posted a 3.9% increase in net sales to €16.2 billion due to a 2.2% gain from the price-mix effect. The company also posted a 3% rebound in truck tire sales, a 9% growth in its specialty businesses and a 3.4% increase from changes in the business base following its acquisition of Fenner PLC earlier this year.