Pirelli forecasts telecom gloom

Pirelli swooped on Telecom Italia in July

Italian tyres, cables and telecoms group Pirelli has reported a sharp drop in third-quarter profits which it blamed on the global economic slowdown.

Pirelli, which earlier this year took over Telecom Italia, posted a net profit of 63m euros (£38.9m; $56.5m), a 76.2% fall from the same period last year.

"The deterioration already seen in the macroeconomic situation, aggravated by recent international events, will also influence the last quarter," it said.

The company said in a statement that its third quarter performance had also been hit by a worsening crisis in the telecoms industry, which was unlikely to improve soon.

Pirelli had already warned that full-year operating profit would fall short of 2000 results.

The third quarter results do not include the impact of the Pirelli's 7.0bn euro (£4.3bn; $6.3bn) purchase of Telecom Italia parent Olivetti.

The deal was announced in July but only completed at the end of September.