Toyo Tire & Rubber Co. Ltd. has lowered its fiscal 2004 earnings forecast after profits fell markedly in the first half on increased costs for raw materials and other operating functions.
The firm's net earnings for the six months ended Sept. 30 fell 66.2 percent to $7.8 million, while sales slipped only 1.4 percent to $1.08 billion. Operating income fell nearly 70 percent to $17.1 million.
As a result, the firm reduced its net profit forecast for 2004 by nearly 10 percent to $33.4 million and the operating income forecast by 37 percent to $59.6 million. Sales still are expected to be on par with 2003 at $2.3 billion, although the company indicated tire sales would be up and automotive products revenue down.
Highlights of the April-September period included increasing production at the Cheng Shin-Toyo Tire & Rubber Co. joint venture in Kunshan, China, accelerating construction of a joint venture truck and bus tire plant in Xiamen, China, and setting up a sales and marketing company in China. The Xiamen project, CSTP (Xiamen) Co. Ltd., should now start production this spring, Toyo said.
For the remainder of the fiscal year, Toyo said it will focus on improving the bottom line by accelerating the adoption of new production and inventory systems, increasing the production of high-performance car and SUV tires and expanding sales efforts for these products in North America.