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Investing.com -- Italian tire manufacturer Pirelli & C SPA (BIT:PIRC) reported first-quarter results that surpassed analyst expectations, with both revenue and adjusted EBIT coming in ahead of consensus estimates.
The company also reaffirmed its full-year 2025 guidance, but cautioned that adjusted EBIT was likely to come in at the lower end of guidance if current U.S. tariffs persist.
Moreover, Pirelli announced that talks to fix the relationship with its top shareholder, China’s Sinochem, ended without a breakthrough.
Pirelli’s shares fell 2% in Milan trading on Thursday.
Pirelli posted Q1 revenue of 1.76 billion euros, slightly above the company-provided consensus of 1.74 billion euros. This represents a 3.7% increase compared to 1.70 billion euros in the same quarter last year. Adjusted EBIT came in at 279.8 million euros, beating the consensus estimate of 270 million euros and marking a 6.5% YoY improvement. Net income rose 26.7% YoY to 127.2 million euros, surpassing the 124 million euro consensus.
The company’s performance was driven by a 0.8% increase in volumes, led by market share gains in the high-value segment, which now accounts for 81% of total revenues. Pirelli also benefited from a 3.9% improvement in price/mix, primarily due to mix enhancement.
"Our focus on the high-value segment continues to pay off, allowing us to deliver solid results despite challenging market conditions," said Marco Tronchetti Provera, Executive Vice Chairman and CEO of Pirelli.
Pirelli confirmed its 2025 targets, which were previously announced in February. However, the company noted uncertainty regarding the duration and impact of tariffs, given ongoing negotiations between the USA and its main commercial partners. In response, Pirelli has launched a mitigation plan to ensure its adjusted EBIT target and cash flow remain at the lower end of guidance if current tariffs persist.
The company’s net debt at the end of March stood at 2.62 billion euros, slightly better than the consensus estimate of 2.64 billion euros.
Pirelli said Wednesday that efforts to resolve tensions with its largest shareholder, China’s Sinochem, had ended without progress.
The Italian tyre manufacturer, along with its second-largest shareholder Camfin, has previously expressed concerns that Sinochem’s stake is obstructing Pirelli’s growth plans in the U.S., where projects linked to Chinese ownership face political resistance.
In a statement, Pirelli said that "the proposals extended by Pirelli to Sinochem have been in fact rejected," without disclosing further details.
Camfin voiced its support for Pirelli’s strategy and warned that "should the current situation with Sinochem not be settled quickly, Camfin would be forced to assess the effects of such behaviour on Pirelli and the shareholders’ agreement."
Luke Juricic contributed to this report.