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Investing.com -- Pirelli (BIT:PIRC) shares slid 3% in Milan after the Italian tyremaker slashed its full-year revenue forecast on increased pressure from foreign exchange (FX) headwinds, but reaffirmed its profitability target as efforts to offset the impact of U.S. tariffs proved effective.
The Italian tire maker now expects 2025 revenue between €6.7 billion and €6.8 billion, down from its previous range of €6.8 billion to €7 billion.
Pirelli maintained its EBIT margin target at approximately 16%, while narrowing its free cash flow forecast to €550 million from the previous range of €550–570 million.
"Company-compiled consensus sees group adj. EBIT at €1,074m (15.8% margin), thus the Pirelli guide is now in line with cons. (+0.6%) at the midpoint," Morgan Stanley (NYSE:MS) analysts noted.
The company noted that previously implemented mitigation measures limited the second-quarter impact of U.S. tariffs to €6 million. Without those actions, the drag on adjusted operating profit would have been €15 million.
For the second quarter, net profit rose 4.5% year-on-year to €136.8 million, while adjusted earnings increased 0.7% to €278.5 million.
The adjusted margin improved slightly to 16% from 15.8% a year earlier.
Quarterly revenue dipped 0.7% to €1.74 billion, in line with analyst expectations, but grew 4% on an organic basis, excluding currency effects.
Adjusted operating profit and net income also came in ahead of consensus forecasts of €275 million and €123 million, respectively.