TOKYO—Bridgestone Corp.'s adjusted operating profit for the three months ended March 31 fell 39.3 percent to $457.5 million on 11.3 percent lower sales of $6.91 billion, as the outbreak of COVID-19 led to global production suspensions and low demand.
Lower volumes had a negative impact of $266 million on profitability while, price mix and raw material effects helped partially offset the costs.
The net result was a $725.1 million loss.
Due to the difficulty in generating "rational" performance figures for the remainder of 2020, Bridgestone, at this time, did not issue a financial forecast for the fiscal year, opting to do so "promptly when calculation becomes possible."
For the full year, Bridgestone said it expected demand for OE and replacement tires to be "substantially lower" than indicated in its February forecasts, due to "significant stagnancy" in the global economy.
Sales fell in all regions with Asia/Pacific (including China) registering the biggest decline—25 percent to $826.5 million.
Revenue in the Americas region dropped 8.5 percent to $3.33 billion; operating profit in the region fell $202 million into the red.
Bridgestone did not give a breakdown of tire and non-tire sales data, but did note that tire production was down 17.5 percent to 40,000 metric tons. This includes a 13.3 percent drop in the Americas to 13,000 tons.
During the quarter, Bridgestone suspended production for the better part of a month at most factories in the Americas and Europe/Middle East/Africa, while production in Japan was not affected until late April, and then for only a few days, Bridgestone said.
In terms of volume, passenger tire unit sales fell 15 percent overall, with China showing the biggest drops both in the OE and replacement segments. In North America, OE sales dropped 19 percent and replacement sales were off 11 percent.
Volume sales for truck and bus tires fell 13 percent as China registered 31 percent decreases in each of the OE and replacement segments. OE sales in North America dropped 26 percent, while replacement market sales grew by 2 percent.
The Japanese group did not offer an outlook for the full year, citing "unpredictable elements that may cause fluctuations."
Looking forward, Bridgestone said it expected tire demand to recover with the relaxation of travel restrictions and the restart of economic activities once the COVID-19 outbreak is under control.
"However, at this point, it is difficult to foresee when the virus will be controlled in each region and how quickly their economics will recover," Bridgestone said.