OSAKA, Japan (Feb. 4, 2010)—Toyo Tire & Rubber Co. Ltd. posted improved profits in the quarter and nine months ended Dec. 31, prompting company management to revise the firm's fiscal 2010 earnings forecast upward.
The higher profits were achieved despite a drop in sales of nearly 9 percent for the quarter and of 19.2 percent for the nine months.
Toyo reported operating income of roughly $83 million in the quarter, pulling the firm into the black by nearly $69 million for the nine months. Sales in the quarter and nine months fell to $956 million and $2.36 billion, and the company edged back into the black on a net basis by $4.5 million.
As a result, Toyo management has revised its fiscal 2009 forecasts for operating and net income by 42 and 190 percent, respectively, to about $79 million and $32 million. Coupled with a slightly higher sales outlook, the firm should achieve operating and net earnings/sales ratios of about 2.5 and 1 percent.
The tire segment reported $72.7 million in operating earnings in the quarter, pulling the business $59 million into the black for the nine months. Sales in the quarter fell 10.1 percent to $738.4 million and were off 16.9 percent through nine months to $1.81 billion.
Toyo attributed the improved tire segment performance to a rebound in OE sales in Japan, but these were offset by weak aftermarket demand there as well as substantially lower sales in the U.S. and Europe.
Sales in North America slipped 8.1 percent in the quarter to $274.3 million and by 18.6 percent for the nine months to $705.3 million. Despite the lower sales, the North American business units more than doubled operating earnings in the quarter, Toyo reported.