Toyo posts strong Q1, raises 2022 outlook

HYOGO, Japan—Toyo Tire Corp. reported double-digit increases in sales and earnings for the quarter ended March 31, prompting management to raise its fiscal 2022 forecasts for both.

Operating income was up 27.3 percent to $139.2 million on 16 percent higher sales of $877 million. The changes improved the operating ratio one-and-a-half points to 15.9 percent. Net earnings were up 46.4 percent to $153.5 million.

Toyo's tire business unit posted 17.8 percent higher sales of $788.3 million and 26.4 percent better operating income of $143.4 million, boosting the operating ratio one point to 18.2 percent.

Toyo's sales improvement came largely due to a 29.1 percent jump in business in North America to $542.6 million. With the increase, North American now accounts for 62 percent of Toyo's global business, up from 56 percent a year ago.

The North American operations were profitable as well, reporting 52.3 percent higher operating income for the period of $45.9 million, or 8.5 percent of sales.

Toyo noted in its published first-quarter results that it the number of points-of-sale that offer the Toyo brand increased sevenfold, to 40,000 from 5,500, in 2021 versus 2018, when the company revised its sales strategy and began selling through larger national dealers.

Toyo did not elaborate on the reasons for the improved sales or earnings beyond publishing data that show the positive effects of higher revenue more than offset higher costs for raw materials and freight.

For the full year, Toyo is raising its sales outlook 6.6 percent over its earlier projection to nearly $4.2 billion. That amount of revenue would be 23.2 percent ahead of that reported in fiscal 2021, Toyo's figures show.

The revised outlook for operating income is 12.4 percent higher than the earlier forecast but still 5.8 percent lower than in fiscal 2021.

Toyo's outlook for business in North America is similarly bullish, with a sales revenue forecast of roughly $2.6 billion, or 11 percent higher than earlier projections as well as 33.4 percent ahead of fiscal 2021.

Toyo's tire-related revenue includes sales of both Toyo- and Nitto-branded tires.