TOKYO (Feb. 20, 2004) — Bridgestone Corp. expects “challenging” trading conditions during 2004, due to rising raw material prices and the weakness of the dollar despite good tire market prospects in the U.S. and Europe.
The negative factors “could offset the positive contribution from generally strong economic trends,” to leave operating income around a third lower than in 2003 with sales basically unchanged, Bridgestone said in releasing its fiscal 2003 results and 2004 forecast.
For 2003, Bridgestone posted an operating income basically unchanged at $1.58 billion, on 2003 sales of $19.9 billion, 2 percent higher than in the previous year. The results reflected a year of differing fortunes in each of the company's main global regions, including strong gains in Europe.
At Bridgestone's tire business, which represented 80 percent of its 2003 global sales, operating income fell 4 percent to around $1.28 billion, due mainly to rising raw material prices and pension-related costs.
The earnings dip came despite “successful” product introductions and marketing programs worldwide, which helped to lift sales by 2 percent, to $15.8 billion, Bridgestone said.
Sales of non-tire products rose 4 percent to $418 billion, while operating income increased 22 percent to $298.3 million. Bridgestone linked the gains to solid exports of industrial products and chemical products from Japan and higher sales of automotive components.
In the Americas, yen-denominated operating income rose 5 percent to $168.1 million, on 1 percent lower sales of $8.43 billion. Price increases, a better product mix and strong automotive component sales offset higher raw material and pension costs, Bridgestone said.
Unit tires sales were strong in most of the main market segments, including solid growth in demand for Bridgestone-brand replacement tires. Sale of original equipment tires, however, declined, the group noted.
Bridgestone forecasts gains of 6 and 5 percent, respectively, for sales and operating earnings for Bridgestone Americas in 2004.
In Europe, by contrast, group sales rose 20 percent to $2.41 billion, while operating income climbed 87 percent to $132.8 million. The group linked the gains to increased sales of high-value products, restructuring efforts in 2002 and a strengthening of the euro against the yen.
Group-wide, sales in Japan rose 2 percent, but operating income fell 5 percent on rising raw materials and pension-related costs. Unit sales were solid in original equipment tires and significantly increased in exports to Europe, the Middle East, Asia and Australia. These gains offset lower unit sales of replacement tires in Japan on weak demand and supply issues following the Tochigi plant fire, Bridgestone reported.