UPDATE 2-Key Pirelli tire unit Q1 flat, forecast confirmed

(Recasts with focus on tire business; adds quotes, details)

By Gilles Castonguay

MILAN, May 9 (Reuters) - Pirelli & C's (PECI.MI: Quote, Profile, Research) main tire business had virtually flat results for the first quarter due to a tough market, but stuck to its forecast for the year despite rising raw materials costs and weaker car sales in key markets.

For the entire Pirelli group, which includes real estate, broadband applications and other businesses, operating profit was slightly lower for the quarter, and the forecast for the year also remained unchanged.

"The Pirelli group confirms its forecasts for a result of its businesses in line with last year," Chairman Marco Tronchetti Provera told analysts on a conference call.

"Pirelli Tire forecasts slightly improved results," he added.

Pirelli shares ended off 0.02 percent at 0.553 euros.

Germany's Continental AG (CONG.DE: Quote, Profile, Research), which makes car components as well as tires, also stuck to its forecast for the year when it reported higher quarterly results last month.

But France's Michelin (MICP.PA: Quote, Profile, Research) was forced to cut its target as it struggled to cope with the rise in raw materials prices.  Continued...