TOKYO (Nov. 1) — Bridgestone Corp.´s net income fell almost 70 percent in the nine months to $424.1 million, as operating income for the period also slipped 19 percent to $1.05 billion.
The company said the drop in profits was due to the "continued global upward movement in the cost of crude oil and other raw materials."
In the nine-month period ending Sept. 30, Bridgestone recorded sales growth of 13 percent to $18.3 billion. Operating income yielded an operating margin of 5.7 percent. Net income was down from $1.35 billion in the corresponding period of 2005.
In the tire segment—which contributed 70 percent of corporate operating income—operating profit fell 27 percent to $727.8 million, yielding an operating margin of 5 percent. Bridgestone said the decrease in operating income resulted from the "significant" impact of high raw material costs. Sales in the tire segment rose 13 percent to $14.6 billion.
In the Americas, Bridgestone´s sales rose 18 percent to $8.39 billion as operating income fell 31 percent to $240 million as raw material prices could not be offset, the firm said.
"In North America, unit sales of passenger car and light truck tires declined in both the original equipment and replacement sectors due to an industry-wide decrease in demand," Bridgestone said.
For the full year, Bridgestone expects sales to increase 10 percent to $25 billion, though operating income and net income are projected to fall 23 and 66 percent, respectively.