TOKYO—Rising raw materials costs and ongoing restructuring in Bridgestone Corp.'s diversified products combined to impact the company's first quarter operating income, which dropped 22.8 percent on 1.3 percent lower sales.
Operating income fell to $699.6 million, while sales fell to $7.7 billion, with both tires and diversified products units posting lower sales for the period ended March 31. As a result, the operating ratio fell 2.5 points to 9.1 percent.
Net income fell 4.8 percent to $548 million.
Bridgestone is restructuring its diversified products operations—which produces conveyor belts, hydraulic hoses, rubber tracks, seismic shock-absorbers, automotive parts, construction materials, sports equipment—to focus more on solution packages, the company said last year.
The tire division suffered a 17.4 percent drop in operating income to $721.4 million on 1 percent lower sales of $6.44 billion. Globally, Bridgestone reported 3 percent lower consumer (passenger/light truck) unit sales, versus 1 percent higher commercial tire sales and 15 percent higher ultra-large OTR tire sales.
The Americas business unit saw operating income slide 21.4 percent to $303.1 million on 0.3 percent higher sales of $3.72 billion.
Bridgestone reported U.S. replacement market passenger/light truck tire sales were flat with the 2018 quarter while commercial tire sales were down 6 percent. In the original equipment segments, the trend was reversed—consumer tire sales were down 14 percent and commercial tire sales were up 16 percent.
Elsewhere, revenue in China and Asia-Pacific dropped 4 percent.
For the full fiscal year, Bridgestone is projecting a 17 percent drop in operating income on 2 percent lower sales.