Increased replacement tire demand boosts ‘strong' Q3 for Bridgestone

TOKYO—Bridgestone Corp. reported strong results for both the third quarter of 2021 and the first nine months of the year, helped by increasing demand in the replacement passenger car tire segment.

Adjusted operating profit for the three months ended Sept. 30 rose 53.6 percent over the 2020 period to $924.5 million on 12.4 percent higher sales of $7.57 billion. Net income stood at $641 million; the comparative 2020 period was a loss.

For the nine-month period, operating profit was up 168 percent at $2.53 billion on 19.9 percent higher sales of $21.8 billion. Net earnings were $3.84 billion; the 2020 comparable period was a net loss.

The tire business unit reported a 141.2-percent jump in operating income for the nine-month period, to $2.69 billion, on 20.9 percent higher sales of $19 billion, yielding an operating ratio of 14.2 percent, double that of a year ago. Within the business unit, all sectors reported double-digit growth over the comparable 2020 period.

Sales in the Americas rose 16.5 percent in the quarter to $3.43 billion and 23.2 percent during the nine months to $9.52 billion.

Bridgestone said sales of original equipment passenger car and light truck tires slowed down in the third quarter due to a decline in automotive production caused by continued chip shortages.

Replacement sales, however, were strong "resulting in significant increase in sales and profit compared to the previous year," the group added.

Truck/bus tire sales were strong, particularly in North America, while off-road tires witnessed a strong recovery sequentially, due to demand from construction and mining sectors.

Over the nine-month period, Bridgestone said $600 million in revenue related to increased selling prices and improved mix more than of $473 million in cost related to raw-materials price inflation.

Higher unit volumes for the first three quarters contributed $790 million to operating profit, while production efficiencies and foreign exchange rates had positive impacts of $790 million and $109 million, respectively.

Bridgestone at this time said there is not change to the fiscal 2021 forecast issued in August, although it did acknowledge that its fourth quarter earnings will be "strongly affected" by the rising costs globally of raw materials, ocean freight and energy and in the U.S. by rising labor costs.

The company said it hopes to minimize these unfavorable impacts by focusing on improving the price/mix component and controlling the expense/cost structure.