HYOGO, Japan—Toyo Tire Corp. reported a double-digit improvement in operating income in the quarter ended Sept. 30 on 2.9 percent lower sales, prompting management to revise upward its earnings expectations for the full fiscal year.
For the quarter, Toyo reported operating income of $133 million, up 26.9 percent, on sales of $907 million. Net income was up 15-fold to $52.5 million.
The Tire Division reported a 19.1 percent improvement in operating income, to $134.7 million, or 2.2 percent lower sales of $813 million, yielding a three-point gain in the operating ratio to 16.6 percent.
Toyo's business in North America improved 5.4 percent in the quarter to $531 million, while operating income in the region jumped 62.1 percent to nearly $49 million. The firm's unit sales during the period were up 4 percent over the comparable 2019 quarter but they still lag the 2019 totals for the year-to-date.
For the nine-month period, Toyo's corporate operating income fell 16.7 percent to $205 million on 11.1 percent lower sales of $2.3 billion. Net income fell 29.8 percent to $92.9 million.
The Tire Division's operating income for the January-September period was off 14.5 percent to $223.5 million on 9.5 percent lower sales of $2.05 billion.
Business in North America was off 5.8 percent to $1.28 billion.
Toyo's figures also showed the considerable impact of the COVID-19 pandemic on production. In North America, for example, production in tonnage went from 18,300 metric tons in the first quarter to 8,000 tons in the second quarter and back to 18,300 in the third quarter.
Due to the "rebound" in sales to near parity with fiscal 2019, Toyo management upgraded the firm's outlook for fiscal 2020, raising earnings and sales expectations 10 percent and 3 percent, respectively, over the mid-year forecast.
The revised profit projections still will fall short of the fiscal 2019 performance by nearly 12 percent, Toyo reported, with sales down about 10 percent. Toyo's Tire Division will fare marginally better—sales down 8.7 percent versus 2019—while business in North America will outperform Toyo's other regions, finishing the year 6.7 percent behind 2019 at roughly $1.7 billion.