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Published on September 9, 2002

Bridgestone looks ahead

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Date Published September 9, 2002

Bridgestone Corp. has the most bullish outlook for the rest of 2002 and for 2003 among the world's largest tire makers.

The Japanese company expects operating income this year to rise 81 percent to $1.1 billion and sales to increase 4 percent to $18.3 billion. In the first half, Bridgestone's operating profits climbed 78 percent while sales improved 6 percent.

Groupe Michelin, which reported better-than-expected first-half results, told shareholders it expects its operating profits to rise slightly for the full year. The French-owned company warned that an improvement depends on continued stability in raw materials prices and exchange rate parity.

For the first six months, Michelin's operating income grew 16 percent, sales advanced 1.4 percent, and net earnings, excluding a one-time capital gain in the 2001 period, nearly quadrupled to $228 million.

Michelin's unit sales grew 2.2 percent for the first half, but the revenue gain was held back by negative currency fluctuations.

Goodyear, which reported an operating loss of $34.3 million for the first half, made no specific predictions for fiscal 2002, citing the continuing economic volatility and its effects on the replacement market in both the U.S. and Europe. The company's first-half sales slipped 3 percent as unit volume fell 1.7 percent.

Sumitomo Rubber Industries Ltd. returned to the black in the first half, but cautioned that continued economic uncertainty, a stronger yen and rising rubber prices make continued improvements in the second half difficult.

Pirelli Group is targeting 4.5-percent annual growth by its tire sector the next several years, according to a three-year business plan disclosed earlier this year. It will put more emphasis on the high-performance end of the market, which will include run-flat tires of Pirelli's own design as well as Pax-type tires produced in partnership with Michelin. In particular, Pirelli expects to be able to leverage advances in technology-like the Modular Integrated Robotized System of tire manufacturing-into higher sales.