By Pietro Lombardi
Shares in Compagnie Generale des Etablissements Michelin and other tire manufacturers trade higher Tuesday after the French company's results for last year and its outlook for the year ahead lifted investor worries over the sector.
The French tire maker reported a net profit of 1.68 billion euros ($1.90 billion), slightly below the EUR1.70 billion it reported for the previous year. Sales rose 0.3% to EUR22.03 billion, it said.
The company's segment operating income--its key operating measure--rose 11% at constant exchange rates to EUR2.78 billion.
The results "revealed strong organic profit growth on better net price mix and less-than-feared volume weakness in 4Q," Jefferies said.
The company expects its 2019 segment operating income to exceed last year's figure at constant exchange rates. It also forecast structural free cash flow of more than EUR1.45 billion.
The guidance for 2019 is in line with expectations, Jefferies added "but details should drive upgrades to consensus and sentiment."
Michelin shares trade 11% higher at 0839 GMT.
The shares are down 20% in the past 12 months after global auto stocks were hammered by concerns over global trade, a slowdown in China and tightening emissions rules in Europe.
Shares in Continental and Pirelli & C. SpA (PIRC.MI) also gain ground, trading 3.9% and 4.0% higher, respectively.
--Max Bernhard contributed to this story
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