Michelin says profits halved in 2008

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Michelin says profits halved in 2008

PARIS (AP): Michelin SCA said on Friday its profits slumped by half in 2008 as a drop in tire sales accelerated sharply at the end of the year, causing it to miss an earnings target set in October.

The Clermont-Ferrand, France-based tire maker said net profit fell 54 percent to euro357 million ($461 million) last year from euro772 million in 2007.

The company's operating margin before non-recurring items, a measure of profitability, sank to 5.6 percent, down from 9.8 percent a year ago and well below the 7 to 7.5 percent that Michelin forecast in October.

In a statement, Michelin said tire markets will continue their strong decline in the first half of this year. It gave no specific forecast for profits but said it will benefit from price increases passed last year and falling raw material costs.

Michelin said tire sales by volume fell 2.9 percent last year, with a 16 percent drop in the fourth quarter alone. Revenue fell 2.7 percent last year to euro16.4 billion, Michelin said. The sinking figures come as the global auto industry is suffering from its worst crisis in decades. The Hindu