Michelin & Cie.’s first-half operating profit rose 11% as gains from a cost-cutting plan kicked in and car sales growth accelerated in China.
Operating profit before one-time gains or costs increased to 1.41 billion euros ($1.55 billion) from 1.26 billion euros ($1.38 billion) a year earlier, the company said in a statement Tuesday. The figure compared to the 1.3 billion euro average ($1.43 billion) of four analyst estimates compiled by Bloomberg.
Michelin, Europe’s biggest tiremaker, has been pushing to make operations in its home market more profitable in order to compete with low-cost competitors amid mixed prospects for tire markets around the world. The new goal is to save 1.2 billion euros ($1.32 billion) in costs from next year through 2020, once the current savings plan is complete this year. The measures include plans to cut 500 jobs at its headquarters in Clermont-Ferrand, France.
Michelin’s cost-cutting plan saved about 155 million euros ($170.36 million) in the first half, offsetting the rising price of production and overhead. The company is on track to save about 1.2 billion euros ($1.32 billion) from 2012 through the end of this year, CEO Jean-Dominique Senard said. Selling more expensive tires and spending less on raw materials, which include rubber, also boosted operating income by 115 million euros ($126.40 million), Michelin said.
By Ania Nussbaum, with assistance from Brian Lysaght
Hyundai Posts 10th Consecutive Profit Decline on China Discounts
Hyundai Motor Co. posted its 10th consecutive quarterly profit decline, as discounts on models such as the Tucson sport utility vehicle eroded earnings in China, the South Korean automaker’s largest overseas market.
Net income fell to 1.66 trillion won ($1.46 billion) in the three months through June, the Seoul-based automaker said Tuesday. Profit beat the 1.62 trillion won average ($1.42 billion) of 15 analysts’ estimates compiled by Bloomberg.
While Hyundai’s deliveries in China increased, the automaker promoted discounts to help lure buyers of Tucson SUVs. Sales growth in the U.S. slowed along with the broader market, and exports from company’s domestic plants slumped as low oil prices and geopolitical risks depressed markets in Africa and the Middle East.
Hyundai said operating profit rose to 1.76 trillion won ($1.55 billion), topping the 1.68 trillion won ($1.48 billion) average of analysts’ estimates.
By Sohee Kim
DuPont Lifts Lower End of Forecast as Earnings Top Estimates
DuPont Co., which plans to complete a historic merger with Dow Chemical Co. later this year, raised the lower end of its full-year profit forecast and posted second-quarter earnings that surpassed analysts’ estimates as cost cuts helped boost profit in every business segment.
The company posted adjusted earnings of $1.24 a share, exceeding the $1.10 average of 17 estimates compiled by Bloomberg. Full-year operating earnings excluding restructuring costs and other items will be $3.15 to $3.20 a share, DuPont said in a statement Tuesday. The Wilmington, Delaware-based company previously forecast $3.05 to $3.20 a share, and analysts on average had estimated $3.14.
CEO Ed Breen is cutting 10% of the workforce ahead of the $60 billion Dow merger, the biggest ever in the chemical industry. That helped reduce operating costs by 12% in the quarter. Earnings in the agriculture unit, DuPont’s biggest business, climbed 12% as demand for corn seed and insecticide more than compensated for lower soybean volume in North America.
Shareholders of DuPont and Dow approved the 50-50 merger of the two largest U.S. chemical makers last week. The companies are now focused on winning antitrust clearance.
By Jack Kaskey
Texas Instruments Earnings, Forecasts Beat Views
Texas Instruments Inc., the largest maker of analog semiconductors, forecast sales and profit that may beat analysts’ estimates on stronger orders for chips used in cars and industrial machinery.
Third-quarter net income will be 81 cents to 91 cents a share, the Dallas, Texas-based company said in a statement Monday, with sales at $3.34 billion to $3.62 billion. Those forecasts compare with average analyst estimates of 81 cents a share on sales of $3.38 billion, according to data compiled by Bloomberg.
In the second quarter, Texas Instruments’ net income rose to $779 million, or 76 cents a share, from $696 million, or 65 cents, a year earlier. Revenue rose 1.3% to $3.27 billion, in the period, the chipmaker said. Analysts on average had projected net income of 73 cents on $3.2 billion in sales. The stock, which has rallied to a record this year, rose as much as 6.4% to $70.44 in extended trading following the announcement.
Under CEO Rich Templeton, Texas Instruments has spread its bets across multiple markets for semiconductors by building itself the broadest product range and customer list in the industry. While that strategy hasn’t delivered a surge in sales growth, the company has increased profitability and cash returns to investors.
By Ian King