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PARIS, July 30 (Reuters) - French tyre maker Michelin on Tuesday raised its operating margin target for 2002 as it posted a 31 percent drop in first half net profit that was entirely due to an exceptional gain which inflated last year's bottom line.
Europe's largest tyre manufacturer said net profit fell to 254.1 million euros in the six month period, while operating profit pushed up 16 percent to 569.6 million euros.
The figures were better than a consensus forecast for net profit of 216 million euros and operating profit of 546 million.
In a sign that business conditions were improving Michelin, which has been plagued for much of the past year by a weak car market and high raw materials prices, said it was nudging up its margin target for 2002 to 7.0-7.4 percent.
Previously, the company had been targeting a margin of 6.7-7.4 percent.
Nevertheless, the firm said market conditions in the second half of the year were still expected to be difficult and uncertain.
First half figures for 2001 were inflated by a capital gain on the sale of the firm's 2.8 percent holding in French carmaker PSA Peugeot-Citroen . Stripping out that gain, net profit rose 279 percent to 254.1 million euros from 67 million.
Michelin shares have risen 13 percent in the past three trading sessions amid a broad market rebound. The stock is up five percent since the start of the year, one of the few firms in the French blue-chip index to have risen in 2002.