Tyre maker Nokian trims profit view as quarter three sales fall in Russia, Nordics

Tyre maker Nokian trims profit view as quarter three sales fall in Russia, Nordics
FILE PHOTO: A Nokian tyre is on display at a tyre assembling centre and shop in Moscow, Russia August 8, 2014. REUTERS/Maxim Shemetov/File Photo -
Maxim Shemetov(Reuters)
Text size Aa Aa

HELSINKI (Reuters) - Finland's Nokian Tyres on Wednesday cut its full-year profit outlook after reporting a surprise fall in quarterly earnings, dented by unfavourable currency moves and high inventory levels in Russia.

Nokian, which has a large plant in Russia and a smaller one in Finland, said 2018 sales and operating profit are now expected to be flat or slightly higher from 2017, compared with a previous forecast of growing sales and profit.

Third-quarter operating profit dropped 4 percent from a year earlier to 86 million euros ($97.5 million), clearly below analysts' average expectation of 95 million euros in a Reuters poll. [nL8N1XA55A]

Quarterly sales fell 2 percent in total - 18 percent in Russia and 4 percent in the Nordic region - while North America and Central Europe showed some growth from a year earlier.

"Net sales in July−September were negatively impacted by high inventory levels of summer tires in Russia and lower new car sales in Sweden and Norway," Chief Executive Hille Korhonen said in a statement.

Rivals Michelin of France and Continental of Germany have also trimmed their forecasts in the past months, citing slower growth, higher costs and Europe's new emission standards. [nL8N1WY6Q5][nL8N1VD23D]

"(Nokian) still makes good margins with passenger tyres but sales are weaker, especially in the Nordics and Russia, and currency headwind is significant. I expect the share price to fall," said OP Bank analyst Jari Raisanen, who has an "accumulate" rating on the stock.

($1 = 0.8819 euros)

(Reporting by Jussi Rosendahl, Editing by Sherry Jacob-Phillips and Gopakumar Warrier)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on for a limited time.