TOKYO (Nov. 4, 2005) — Bridgestone Corp.'s net income for the first three quarters of 2005 skyrocketed 98 percent to $1.41 billion due to a $722 million gain arising from the return of a substantial portion of an employee pension plan.
The plan covered the Tokyo-based firm and some Japanese subsidiaries to the Japanese government. At the same time, Bridgestone/Firestone North American Tire L.L.C. recorded a $240 million loss in the third quarter—the amount the subsidiary agreed to pay to Ford Motor Co. to settle all outstanding financial issues associated with Bridgestone/Firestone's tire recall in 2000 and Ford's May 2001 tire replacement program.
Bridgestone's net sales for the nine-month period jumped 9 percent to $17 billion while operating income rose 11 percent to $1.4 billion. Ordinary income climbed 12 percent to $1.28 billion. Bridgestone attributed the increases to appealing new products, increased marketing efforts, strong demand overseas, enhanced productivity and improved logistics efficiencies.
In the tire segment, the company's operating income in the nine-month period rose 8 percent to $1.04 billion on a 9-percent sales increase to $13.5 billion. Bridgestone said the earnings contribution from this sales growth offset rising raw materials costs.
The tire maker said performance in the Americas is on a recovery track despite concerns about the devastating impact of hurricanes Katrina and Rita during the third quarter. Operating income in the Americas surged 57 percent during the nine-month period to $362 million on a 10-percent increase in sales to $7.4 billion.
In North America, tire unit sales of passenger car and light truck tires declined from the same period in 2004 in the original equipment sector but increased in the replacement sector, Bridgestone said. Unit sales of truck and bus tires also rose over the same period last year, led by growth in the original equipment sector.