TOKYO (Aug. 9) — Higher oil and rubber prices will cut Bridgestone Corp.'s net profits by nearly two-thirds this year, after the firm suffered a 67.7-percent decline in net income in the first half, according to company management.
The manufacturer posted net income for the period of $282 million, and reported its tire division also had a 15.5-percent decline in operating profits, to $497.9 million.
Half-year sales rose by 13.4 percent to $12.3 billion for the Japanese company and 13.3 percent to $9.72 billion for the tire business on the positive effects of the changing yen/dollar exchange rate.
The company said profitability will remain an issue this year because of the price of NR and other raw materials.
Bridgestone Americas posted a modest 4.2-percent rise in operating income to $172.8 million — despite incurring a $135.9 million loss from the closure of two tire plants in the Americas — and 19.6-percent growth in sales to $5.54 billion.
Unit sales of passenger and light truck tires in North America fell in both the replacement and original equipment sectors, while they were up in both truck tire sectors. Bridgestone predicted these trends will continue through the second half.
Bridgestone´s European division was the most under-performing, recording a 25-percent drop in half-year operating income despite a 12-percent sales growth.
Operating income in the home Japanese market fell 8 percent drop, while sales grew 9 percent. The company expects sales in Japan to remain steady but exports to exceed last year´s levels.