TOKYO—Bridgestone Corp. posted a 68.3 percent drop in operating income and a net loss for the six months ended June 30 on 22.1 percent lower sales.
Bridgestone attributed the earnings and sales declines to the negative effects of the COVID-19 pandemic on the global economy.
For the full year, Bridgestone is forecasting the trend established in the first half will continue—sales will fall about 23 percent shy of fiscal 2019 revenue, with pre-tax operating income falling 70 percent short.
For the first half of fiscal 2020, Bridgestone reported operating income of $ $477.2 million on sales of $16.1 billion. The net loss was $203.7 million.
Bridgestone noted reduced volumes and currency depreciation impacts were the primary reasons for the lower earnings. Offsetting these negative factors were gains from lower raw materials and operating expenses and improved price/mix effect.
From a product point of view, Bridgestone's various business units were affected similarly—passenger/light truck tire activities' sales fell 24.9 percent, truck/bus tire activities were off 27.1 percent and "other" tire activities (OTR, farm, aircraft, motorcycle, etc.) were down 20.8 percent.
From a geographic standpoint, Bridgestone reported sales in the Americas fell 22.2 percent to $6 billion. Operating profit fell 59 percent to $323.1 million.
During the period, Bridgestone booked asset "impairment" losses of $97.5 million and $160 million, respectively, to cover recalculated values for the company's "property, plant and equipment" in the Europe, Russia, Middle East, India and Africa segment and its equity investment in TireHub L.L.C. in the Americas.
An impairment loss is typically defined as "recognized reduction" in the carrying amount of an asset triggered by a decline in its fair value.
Bridgestone said the TireHub writeoff is related to its determination that the "intended revenue (from TireHub) is no longer expected as a result of changes in the business environment, such as the impacts of COVID-19."