OSAKA, Japan—Toyo Tire & Rubber Co. Ltd. reported record operating and net income for the six months that ended June 30, fueled by 8.2 percent higher sales.
Toyo chalked up the double-digit earnings performance to higher sales, lower, stable raw materials prices and a favorable currency exchange rate.
Based on the “improved tire sales structure” and the drop in raw materials prices, Toyo revised upward its earnings forecast for the full fiscal year.
The company said its operating and net income jumped 55.8 and 69 percent, respectively, to $209.8 million and $149 million. Sales rose to $1.83 billion, yielding an operating ratio of 11.5 percent, up three and a half points over the fiscal 2013 period.
Its sales growth came primarily from its tire business, according to Toyo, which experienced higher unit sales in nearly all markets. The exception was in the Japanese original equipment sector, where growth came in models where Toyo did not have an OE presence.
Toyo's tire business recorded 69.1-percent higher operating income of $194.2 million on 9.7 percent higher sales of $1.44 billion. The operating ratio jumped nearly five percentage points to 13.5 percent.
Toyo's businesses in North America reported 38.6-percent better operating earnings of $52.9 million on 15.3-percent higher sales of $747.9 million, for an operating ratio of 7 percent vs. 5.9 percent a year ago.
For all of fiscal 2014, Toyo raised its forecasts for operating and earnings 13.8 and 12 percent, respectively, while sticking with its earlier sales forcast of roughly $4 billion. The change would increase the operating ratio more than a full point to 11.4 percent.
The forecast for the tire business is even more dramatic—operating income 16 percent higher than the February projection on record sales of about $3.2 billion. North America will account for all of the projected growth, Toyo said, offsetting sales drops in Japan and other overseas markets.