By Marcel Michelson

PARIS (Reuters) - French tyre group Michelin (MICP.PA: Quote, Profile, Research) on Monday cut its forecast for 2008 operating income and said it would forge ahead with cost cuts to offset the impact of pricier raw materials such as rubber and steel.

The company said it expected its 2008 operating income before non-recurring items to be near that of 2007, while in February it had still expected to post a rise in 2008.

Michelin said it expected a negative impact from the raw material cost rise in 2008 of 600 million euros ($940 million) at constant exchange rates, which the company said was equivalent to 200 million euros at current exchange rates due to the decline of the dollar.

This was unchanged from its February guidance.

Michelin said its first-quarter sales were 4.09 billion euros compared to 4.2 billion last year. The average expectation from Reuters Estimates was for 4.17 billion.

The first quarter figure was down 2.6 percent at current exchange rates but up 2.9 percent at constant exchange rates, it said.

Michelin said that during the first quarter the trading environment had been less supportive than initially anticipated.

It added that most of the mature countries' tyre markets were down. "This trend resulted from a weak trading environment that weighed on overall market morale," Michelin said.