TOKYO—Despite improvements in first-half sales and operating earnings at its largest subsidiary, Bridgestone/Firestone Inc., Tokyo-based Bridgestone Corp. saw its worldwide consolidated net earnings plummet 21.4 percent, compared with the first six months of 1998. Bridgestone reported consolidated net earnings of $308.2 million for the half (36.7 billion yen at an average exchange rate of 119 yen per dollar). Sales for the six months slipped 4.5 percent to $8.75 billion.
The company said the primary reason for the decreases was the appreciation of the Japanese yen relative to the U.S. dollar and other currencies.
Bridgestone/Firestone posted a 6-percent increase in first-half operating earnings on a 1-percent increase in sales, the company said. However, since the U.S. dollar was worth less during the period than it was a year ago, BFS' earnings and sales fell when expressed in yen. As a Japanese company, Bridgestone Corp. reports its results in yen.
The company did not break out results for Bridgestone/Firestone, but did provide them for its ``Americas'' geographic region, including North and South America, where BFS accounts for the lion's share of operations. In that region, operating profit and sales both skidded 9.1 percent, to $264.8 million and $3.71 billion, respectively.
Addressing BFS specifically, the company said the Nashville, Tenn.-based subsidiary's improved first-half results were due ``primarily to increases in sales to original-equipment manufacturers and robust sales in the consumer replacement market, which more than offset decreases in the agricultural and off-the-road markets'' as well as the negative impact of ``difficult business circumstances'' in Latin America.
On a global basis, Bridgestone's tire sales declined 4.4 percent in the half to $6.89 billion, generating operating profit of $710.9 million, a drop of 6.6 percent from the 1998 period.
Looking ahead to its full-year results, Bridgestone confirmed its earlier projections that consolidated net earnings will fall 14 percent to 90 billion yen on a 4.8-percent decrease in net sales to 2.13 trillion yen—or net earnings of approximately $769 million on sales of $18.2 billion, using the company's projected average exchange rate of 117 yen to the dollar.
These figures represent a conservative forecast, given that the yen currently is trading in the range of 109 per U.S. dollar and the three-months forward rate is in the range of 107 yen per dollar.