TOKYO (Aug. 9, 2006) — Yokohama Rubber Co. Ltd. management has lowered its fiscal 2007 earnings target again after suffering double-digit declines in operating and net income in the company's first quarter that resulted from larger-than-expected increases in raw materials costs.
On the positive side, Yokohama posted 11-percent higher sales on the positive effects of “robust growth” in overseas tire business, including 30.5-percent growth in North America.
Yokohama's operating income for the quarter ended June 30 fell 34.2 percent to $15.9 million and net income slipped 16.2 percent to $10.8 million. Yokohama blamed higher administrative costs in addition to the raw materials cost problems for the earnings drops.
Sales grew to $918.6 million as both the tire and multiple business units posted double-digit revenue gains.
The tire business suffered a 64.6-percent drop in operating income, to $8.7 million, on 11.8-percent higher sales of $672.5 million.
Overall sales in North America rose to $193.1 million, and operating income in the region actually improved as well, 27.1 percent to $4.92 million.
Management now expects fiscal 2007 operating income to fall to about $138 million, a 27-percent dip from last year and more than 30 percent lower than its earlier projects from two months ago.