Shares in Michelin jumped by double digits this morning after the French firm promised to deliver increased profits in 2019.
Michelin’s share price rose more than 10 per cent in early trading after the tyre maker posted better-than-expected full-year results and forecast further growth this year.
The company reported an 11 per cent increase in operating profit to €2.8bn (£2.5bn) in 2018, in spite of economic challenges.
Sales volumes bounced back after a decline in the first quarter, despite the impact of slow economic growth in China, the company said. Increased costs of raw materials and an unfavourable currency effect also hit earnings.
But Michelin said it forecast higher growth this year, with acquisitions providing an additional boost. The company led the biggest risers on France’s Cac 40 index.
The positive outlook inflated Michelin’s shares this morning, while shares in rivals Continental and Pirelli rose three and four per cent respectively.
Michelin chief executive Jean-Dominique Senard said: “In 2018, in a difficult economic environment, Michelin demonstrated its ability to increase operating income and sustain the improvements in structural free cash flow achieved in recent years.”
Analysts at UBS kept their “buy” rating for the firm, stating the forecast indicates a small upgrade to consensus.