Finance
Nokian Tyres posts big profit miss, says tariffs add to uncertainty
Published by Global Banking and Finance Review
Posted on February 4, 2025
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Published by Global Banking and Finance Review
Posted on February 4, 2025
(Reuters) -Finland's Nokian Tyres reported a much lower than expected operating profit for the final quarter of 2024 on Tuesday and warned that geopolitical uncertainties, including U.S. President Donald Trump's tariffs, could cause volatility in its markets.
The company's shares slumped 13% by 1143 GMT. They had been trading up 2.5% before the report was published at 1100 GMT.
"The recent announcements of trade tariffs are causing uncertainty," CEO Paolo Pompei said in the earnings statement. He added that Nokian was analysing the possible impact of the tariffs and creating a strategy to address them.
Following Nokian's exit from Russia, where it produced more than 80% of its passenger car tyres before Moscow's invasion of Ukraine, the company has moved production to other sites, including one in Dayton, Ohio.
Nokian said its comparable operating profit fell 19% to 35.9 million euros ($37 million) in the fourth quarter, well below the 59.5 million euros expected by analysts in a company-provided consensus poll.
Sales in the quarter were 415 million euros, versus 418.6 million expected by the market. Nokian booked 67.4 million euros of revenue in the Americas region, or 16.2% of the group sales.
European automotive companies are also struggling with weak demand, high production costs and stiff competition from China, which has led to a streak of layoffs and plant closures in recent months.
Nokian proposed a dividend of 0.25 euro per share for 2024, less than half of the 0.55 euro per share paid out last year.
($1 = 0.9679 euros)
(Reporting by Boleslaw Lasocki in Gdansk; Editing by Milla Nissi)