TOKYO (Aug. 9, 2005) — Bridgestone Corp. is cautioning shareholders the company faces a “challenging” business environment for the rest of the year, with increasing costs for both natural and synthetic rubber and other petroleum-based products eating into profitability.
Bridgestone management expects fiscal 2005 operating earnings to be level with 2004 despite an increase in sales of as much as 8 percent.
For the first half of fiscal 2005, the Tokyo-based tire maker reported a fractional increase in operating income to $831.8 million, while sales grew 8.9 percent to $10.4 billion. Net income nearly doubled to $919.5 million on the effects of an extraordinary gain of $730.4 million related to a pension fund change in Japan.
Bridgestone's tire business suffered a 7-percent drop in operating earnings, to $620.1 million, while sales grew 9 percent to $9 billion. The firm's diversified products business chipped in a 29-percent increase in operating earnings and 11-percent sales growth.
Operating earnings in the Americas rose 23.9 percent to $173.6 million as sales grew 10.9 percent to $4.87 billion, putting the Americas business unit on equal footing with Japan in terms of sales volume. In North America, sales growth came from increased business in replacement passenger and light truck tires and higher truck tire volume in both the replacement and original equipment markets, Bridgestone said.