TOKYO—Bridgestone Corp. has revised upward its fiscal 2021 sales and operating profit forecast due to strong first-half results and the softening of the COVID-19 impact on global businesses.
Based on 24.2 percent growth in sales and a five-fold increase in operating profit for the six months ended June 30, Bridgestone raised its forecasts for full-year operating profit and sales by 38.5 percent and 10.3 percent, respectively, over what it projected in February, yielding an operating ratio of nearly 11 percent.
In disclosing the more optimistic forecast, Tokyo-based Bridgestone noted countries around the world are making progress in addressing the COVID-19 pandemic and carrying out vaccination programs.
The company's earlier forecast was based on the assumption that the global economy wouldn't return to pre-COVID levels until 2023 and that global tire demand would remain low.
"As a result, global tire demand in the first half of 2021 has shown a dramatic recovery at a pace exceeding the group's expectations," Bridgestone said.
For the first six months of the year, Bridgestone reported adjusted operating profit of $1.6 billion on sales of $14.3 billion, with earnings growth aided by the group-wide expense and cost restructuring program.
The tire segment mirrored the corporate performance with 24 percent sales growth, to $12.3 billion, and a nearly four-fold jump in operating income to $1.73 billion, which equates to an operating ratio of 14 percent. All of the segment's operating units posted sales gains of 20 percent or more.
In particular, Bridgstone noted that demand for truck and bus tires and construction vehicles grew significantly, underpinned by solid construction and transport demand. That helped fuel 170 percent growth in operating profit and 24 percent higher sales in the truck/bus tire business to $375 million and $3.38 billion, respectively.
The consumer (passenger and light truck) tire segment reported an 11-fold jump in operating profit to $1.02 billion on 25.5 percent higher sales of $16.5 billion. Demand for replacement tires returned to the pre-pandemic levels of 2019.
The firm's specialties business unit—covering construction, farm, aircraft and two-wheeler tires—reported a 39 percent rise in operating profit to $328.8 million on 19.7 percent higher sales of $1.74 billion.
Viewed by geographical reporting segment, business in Europe/Middle East/India/Africa improved the most, jumping 37 percent to $3.02 billion, followed by the Americas (up 27.3 percent to $6.12 billion) and China/Asia-Pacific (up 25.5 percent to $1.69 billion).
The group's diversified products segment reported an adjusted operating loss of $20 million on revenue of $1.64 billion, with a $57 million operating loss in the chemical and industrial products businesses dragging earnings down.