Nokia Stock- UPDATE 2-Nokian Tyres’ shares up after profit and sales beat forecasts
(Updates dateline, adds detail about capacity increase, CEO comment)
HELSINKI/STOCKHOLM, May 4 (Reuters) – Finnish tyre maker Nokian Tyres saw shares rise 4% on Tuesday after it beat first-quarter earnings forecasts, with a recovery in demand from the COVID-19 pandemic helping it deliver all-time high sales volumes.
The company’s shares, which have climbed roughly 8% so far this year, were up 4.04% at 32.43 at 1245 GMT.
Sales rose 22% to 341.8 million euros ($410.5 million) in the quarter to end March, versus 312.6 million euros expected by analysts in a Refinitiv poll.
Nokian reported 44.3 million euros in quarterly operating profit, up from 9.0 million a year earlier and above analysts’ mean forecast of 37.4 million.
The peer of Michelin and Continental said it anticipates further growth in sales and profit this year, but that it also expects a significant increase in raw material costs in the second half of 2021.
Nokian has said it aims to increase production both in Europe and in North America to four million tyres per year. In January it said it would expand its Dayton factory in Tennessee from two shifts to four, aiming to reach annual input of one million tyres in 2021.
In March it said it would also add a fourth shift to its factory in Nokia, Finland to lift its annual tyre input from two million in 2020 to three million in 2021 and four million in 2022.
Despite Nokian operating at full capacity in Russia and ramping up operations in Finland and the United States, Nokia Chief Executive Jukka Moisio told Reuters it is still too early to say how much of the demand boost signified a permanent rise in market share.
“Clearly recovery is a significant factor but for example in Russia we have somewhat increased our market share,” he said.
$1 = 0.8326 euros Reporting by Helena Soderpalm and Essi Lehto; Editing by Mark Potter and Jan Harvey