SEOUL, South Korea—Hankook Tire Co. Ltd. suffered double-digit drops in operating income for the quarter and nine months ended Sept. 30, despite increased sales for both periods.
The Seoul-based tire maker did not elaborate on reasons for the income declines, other than to mention high raw materials costs and the "impact" of start-up costs for its U.S. plant in Clarksville, Tenn.
For the quarter, operating income fell 29.2 percent to $161 million on 10.1 percent higher sales of $1.37 billion, dropping the operating ratio nearly seven full points to 11.7 percent.
The quarterly sales increase was spurred by higher revenues in Europe (up 20.4 percent to $568 million) and North America (up 8.7 percent to $444 million), Hankook reported, as well as a "sharp increase" increase in sales of UHP tires and premium OE tires in China and higher sales of emerging markets in the ASEAN region.
In North America, Hankook cited higher OE and replacement sales despite weak overall market demand.
For the nine-month period, operating income was off 24.9 percent to $580.7 million on 2.4 percent higher sales of $4.59 billion. As a result, the operating ratio fell more than four points to 12.7 percent.