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Yokohama earnings up, sales down

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TOKYO (Feb. 3, 2010)—Yokohama Rubber Co. Ltd. posted much-improved earnings in the firm's third quarter, ended Dec. 31, although sales dropped nearly 8 percent.

Earnings for the nine months were stable despite a 16.2-percent drop in sales.

Yokohama attributed the earnings improvement to a downward trend in raw material prices, reductions in selling and other expenses and smaller losses on currency translation.

Operating income for the quarter jumped 68.3 percent to $213.3 million, while net earnings of $140.7 million contrasted with a net loss in the year-ago quarter. Sales fell 7.8 percent to $1.54 billion.

Operating earnings for the nine months were essentially unchanged at $187.8 million, while net income was up 40-fold over the comparable fiscal 2009 period to $98.1 million. Sales fell to $3.73 billion.

Yokohama's tire business segment showed earnings improvements in the quarter and nine months, up 75.6 and 18 percent, respectively, to $209.4 million and $181.8 million. Sales fell 7 percent in the quarter to $1.27 billion and 14.6 percent for the nine months to $2.96 billion.

The sales decline in the tire group reflected weak sales in Yokohama's largest markets—Japan and North America—and occurred despite sales gains in China and Russia, the firm said. Sales were affected adversely by the appreciation of the yen against the U.S. dollar and against the euro.

Sales in North America slid 12.8 percent in the quarter to $276 million and 17.1 percent for the nine months to $758.7 million.

The company said management at Yokohama abides by the fiscal projections it released in October 2009 for the full fiscal year to March 31, 2010: Net income of roughly $75 million on 10-percent lower sales of about $5 billion.