Bridgestone Corp. management expects net income to fall by nearly two-thirds this year based on the negative effects of surging oil and rubber prices and first-half profits that plunged 67.7 percent from a year ago.
The Japanese tire and rubber products maker posted net income for the period of $282 million, as the company's tire division also suffered a 15.5-percent fall in operating profit to $497.9 million.
Half-year sales rose 13.4 percent to $12.3 billion for the group and 13.3 percent to $9.72 billion for the tire business on the positive effects of the changing yen/dollar exchange rate.
``The operating environment is expected to remain challenging in 2006,'' the Tokyo-based company said.
``Profitability is still an issue, however, as prices for natural rubber and other raw materials used in the companies' products remain high.''
Bridgestone Americas posted a modest 4.2-percent rise in operating income to $172.8 million-despite incurring a $135.9 million loss from the closure of two tire plants in the Americas. Sales rose 19.6 percent to $5.54 billion.
Unit sales of passenger and light truck tires in North America fell in both the replacement and original equipment sectors during the period, the company said, while they were up in both truck tire sectors.
Bridgestone predicted these trends would continue through the second half.
Bridgestone's European division was the most underperforming, recording a 25-percent drop in half-year operating income despite a 12-percent sales growth.
Operating income in the home Japanese market fell 8 percent, while sales grew 9 percent.
The company said it expects sales in Japan to remain steady but exports to exceed last year's levels.