OSAKA, Japan (Aug. 12, 2008) — Toyo Tire & Rubber Co. Ltd. suffered a 70-percent drop in operating income in its first quarter, prompting management to downgrade the firm's earnings forecast for fiscal 2009 by nearly a third.
For the three months ended June 30, Toyo reported operating income of $12 million on 4.6-percent higher sales of $828.3 million. The net result was a loss of $13.7 million.
For the remainder of the fiscal year ending March 31, Toyo revised downward its forecasts for operating and net income 31.8 and 36.4 percent, respectively, to about $55 million and $13 million. Sales are expected to grow slightly to about $3.5 billion.
Toyo cited continued increases in the costs of raw materials for the changes.
Earnings in the company's tire segment fell 69.2 percent to $12 million while sales improved 6.3 percent to $594.1 million. Toyo said domestic sales overall were down, with original equipment sales up “significantly” and replacement sales down “drastically.”
In North America, tire sales volumes increased but sales revenue edged up only slightly to $268 million due primarily to the foreign exchange effect, Toyo said. Sales in other international markets were up 9.3 percent to $134.3 million.