Pirelli Q1 EBIT drops on weaker tyre, real estate ops; broadly in-line - UPDATE

(updates with further details) MILAN (Thomson Financial) - Pirelli & C SpA said its EBIT profit fell to 114.6 million euros, from 129.5 million a year earlier, depressed by weaker tyre and real estate operations, coming in more or less in line with expectations.

Net profit was 33.8 million euros, against 24.2 million in first quarter 2007, EBITDA 168.0 million, against 181.6 million, and sales 1.314 billion, down from 1.811 billion, the company said.

"For 2008, Pirelli confirms the forecasts for a result in line with the previous year, excluding costs of restructuring real estate activities and any unforeseeable external events," it said.

"In particular as announced in March, Pirelli Tyre results are expected to rise slightly from 2007," it said.

In tyre sector, first quarter net profit was 57.7 million euros, against 58.1 million in first quarter 2007, EBIT 100.3 million, from 103.7 million, and sales 1.077 billion, up 1.6 percent, it said.

Analysts were expecting group net profit of 14 million to 47 million euros, EBIT of 99 million to 110 million, EBITDA of 153 million to 162 million and sales 1.288 billion to 1.320 billion.

For tyre operations, analysts were expecting EBIT of 95 million to 103 million euros, and sales of 1.045 billion to 1.074 billion.

In further details, Pirelli said net profit includes financial costs of 4.3 million euros, down from 46.4 million a year earlier.

In the tyre sector, sales were up 3.2 percent on a like-for-like basis, including the impact of currencies, it said.

"The increases in sales, despite unfavourable replacement tyre markets in Europe and North America, is mainly due to focusing on high value-added segments and focusing on prices," it said.

Broadband/photonic EBIT loss was 3.5 million euros, narrowing slightly from loss of 3.8 million year earlier, it said, adding these losses are due to research and start-up costs.

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