TOKYO (May 11, 2006) — Yokohama Rubber Co. Ltd. reported record sales and net income for fiscal 2006, but management expects earnings to be hurt this year by the continued rise in raw materials costs.
For the year ended March 31, Yokohama reported a 4.7-percent increase in operating income to $193.5 million on 7.7-percent higher sales of $3.99 billion. Yokohama credited price increases, progress in reducing costs, the weakening of the yen/dollar value and growth in unit sales of tires for the earning progress.
Net income jumped 89.4 percent to a record $189.5 million, but more than 40 percent of the improvement came from one-time gains related to changes in the company's pension plan and a tax benefit connected with an earlier write-down of equity in a U.S. subsidiary.
Yokohama's tire division paced the revenue improvement, reporting 9.1-percent higher sales last year of $2.97 billion, but the unit's operating income fell 0.4 percent on the negative effects of higher raw materials costs.
Business in North America last year grew 14 percent to $726 million, Yokohama reported.
For fiscal 2007, management projects operating earnings will drop 4.3 percent because of rising raw materials costs. Sales should continue to grow, though, at a 7.3-percent pace, the company forecast.