Premium tires boost Bridgestone's Q1 sales, earnings

TOKYO—Mining tires and premium passenger replacement tires drove Bridgestone Corp.'s first-quarter sales performance, despite the decrease in truck/bus replacement and OE demand in North America and deterioration of Latin America business.

Bridgestone achieved a 2.9 percent increase in adjusted operating profit to $810 million on a 2 percent bump in sales to $7.17 billion for the quarter, ended March 31, compared with the year-ago period.

Bridgestone attributed the increase to a favorable impact of sales mix improvement through expanded sales of larger rim-diameter replacement passenger tires.

Net profit for the quarter fell 4.5 percent to $583.8 million.

Bridgestone said its quarterly performance also was impacted by flat sales for ultra-large mining tires; a decline in demand for truck/bus tires, mainly in North America and Europe; a delay of summer tire demand in Japan; and the deterioration of Latin America business, especially in Argentina.

Overall OE tire demand decreased year-over-year due to vehicle production decline in most regions, even though the semiconductor shortage is resolved, the company said.

Replacement passenger tire demand in North America and Europe was flat, year-over-year, while truck/bus tire demand decreased due to weaker recovery.

In North America, dealer inventory has normalized while industry demand has grown, driven by imported tires, due to tariff reductions.

Demand for 18-inch and larger rim diameter tires continued solid growth, mainly in North America and Europe, according to Bridgestone. OE demand decreased due to lower vehicle production in most regions, but in North America sales volume grew.

OE demand for truck/bus radial (TBR) tires decreased due to lower vehicle production in most regions, but there was slower demand recovery for replacement tires.

Mining tire demand was stable but ultra-large mining tire sales are flat.

Demand for small and medium construction tires were flat with a decline in the replacement market due to a drop in demand for port/construction tires in Europe and a delay of U.S. construction demand but offset by strong vehicle production in North America.

Bridgestone's specialty tires segment, including farm, mining and construction tires, increased operating profit 21 percent to $262.8 million on a 5 percent bump in sales to $1.06 billion and a 24.7 percent operating margin.

The passenger/light truck segment boosted operating profit 13 percent to $435.4 million on a 4 percent boost in sales to $4 billion.

The truck tire segment suffered a 42 percent plunge in operating profit to $93.6 million as sales dipped 6 percent to $1.58 billion.

In the Americas region, adjusted operating profit fell 32 percent to $248 million despite a 6 percent increase in sales to $3.55 billion.