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Tire makers enjoy surge in "13 profits Bridgestone Goodyear Sumitomo Trelleborg Yokohama Amerityre

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AKRON—Tire makers ended the year upbeat as several companies enjoyed a surge in earnings and sales during 2013, with Bridgestone Corp. and Yokohama Rubber Co. Ltd. reporting record profits.

Another company, Amerityre Corp., which has been losing money for 74 consecutive quarters, was able to cut its second-quarter loss by 44 percent.

Bridgestone recorded double-digit gains in sales and earnings last year on the strength of recovering economic activity in Japan and North America and continued expansion in Asia.

For the year, Bridgestone's operating and net income jumped 53.2 and 17.7 percent, respectively, to $4.48 billion and $2.07 billion.

Sales surged 17.4 percent to $36.5 billion. As a result, the operating ratio rose nearly three percentage points to 12.3 percent.

Net income did not keep pace with operating earnings because of nearly $800 million in extraordinary losses related to fines tied to a U.S. antitrust case, to a product recall and plant restructuring costs in Japan, Bridgestone said.

The Tokyo-based company is projecting more modest growth for the current fiscal year, anticipating 5- and 6- percent growth, respectively, in operating income and sales.

Net income, on the other hand, is expected to improve more than 40 percent without the drag of extraordinary losses.

Bridgestone's tire business reported 53.4-percent higher operating income of $4.1 billion on 18.8-percent better sales of $31.1 billion.

Bridgestone reported unit sales of passenger and light truck tires in North America increased “steadily” over 2012, while sales of truck and bus tires rose “strongly.” Specific sales figures for North America were not disclosed.

Otherwise, tire division sales recovered in Japan and grew steadily throughout Asia/Pacific, but sales in Europe fell from 2012.

Goodyear more than tripled its net income to $600 million, despite 7-percent lower sales of $19.5 billion in 2013.

The Akron-based tire maker attributed the lower re venues to lower sales in its third-party chemical sales in North America, unfavorable foreign currency translations, lower tire unit volumes and lower price/mix.

Tire unit volumes fell 1 percent to 162.3 million.

Goodyear's North American business reported 72-percent higher segment operating income of $199 million—attributed to favorable price/mix net, lower conversion costs and increased tire volume—while sales fell 8 percent to $2.13 billion. Tire unit volumes grew 3 percent to 16.3 million units while OE unit volume was up 7 percent. Replacement tire shipments were up 1 percent, Goodyear said.

However, Goodyear reported record fourth-quarter segment operating income of $419 million, a 54-percent increase over year-ago period on 5-percent lower sales of $4.79 billion. Net income attributable to shareholders was $228 million in the quarter.

Goodyear credited the improved quarterly earnings to a favorable price/mix, lower unabsorbed overhead and higher unit volumes.

Sumitomo Rubber Industries Ltd. reported double-digit gains in operating and net income for fiscal 2013 on 9.9-percent higher sales.

The company's operating earnings for the year rose 10.5 percent to $788.7 million while net income jumped 26.4 percent to $458.5 million. Sales revenue increased to $7.99 billion.

Sumitomo offered no commentary on the results.

Trelleborg Wheel Systems' operating income climbed 9.1 percent to $75.3 million last year on 8.4-percent higher sales to $643.5 million, which the unit of Trelleborg A.B. attributed to the first-time inclusion of results of Maine Industrial Tire, acquired in late 2012.

Without the contribution of Maine Tire, Trelleborg's organic sales were down 1 percent from 2012, the firm reported, with agricultural tires up slightly and materials-handling tires down slightly.

During the fourth quarter, Trelleborg Wheel acquired the industrial tire distribution business of Pircher Alfred s.a.s., with distribution centers in Milan and Bologna, Italy.

Parent Trelleborg A.B. reported double-digit drops in sales and earnings for the year. As a result, Trelleborg Wheel accounts for roughly 20 percent of Trelleborg's sales volume.

Yokohama Rubber reported record sales and income for fiscal 2013, reflecting a recovery in the firm's tire business in North America and China.

Net income increased 7.3 percent to $358.3 million. on 7.5-percent higher sales of $6.16 billion. Operating income jumped 14 percent to $579.8 million.

In addition to sales gains in China and North America, Yokohama said its results benefited from strong sales of high-pressure hoses, industrial materials and aircraft fixtures and components together with a decline in raw materials costs and the weakening yen/-dollar value.

The strong showing prompted YRC management to call for another year of record sales and earnings.

The company projects that operating and net income will improve about 11 and 7 percent, respectively, with sales growing about 7.5 percent.

Yokohama's tire operations reported 6.1 percent better operating income of $471 million on 7.9-percent higher sales of $4.91 billion.

YRC said the recoveries in China and North America offset the adverse effects of slumping demand in Russia and elsewhere in Europe and escalating price competition worldwide.

Yokohama posted overall sales growth in Japan, bolstered by gains in original equipment and replacement tires, including “vigorous” demand for fuel-efficient vehicles.

YRC's business in North America grew 21.2 percent to $1.38 billion. Operating income, however, slid 15 percent to $49.8 million.

Polyurethane tire developer Ameri-tyre cut its net loss in the quarter ended Dec. 30 by 44 percent on 73.3-percent higher sales.

Amerityre's losses fell to $193,282 from $344,644 a year ago. Revenue rose to $1.26 million on higher sales of hand-truck and agricultural tires, the company said.

The loss was the tire maker's 74th consecutive quarterly loss, bringing its cumulative loss over 18 years to $63.5 million.

Its six-month net loss was $367,848—an improvement of 41 percent from $622,532 a year ago. Sales were up 40 percent to $2.3 million.

The Boulder City, Nev.-based company attributed the earnings improvement to the increased sales revenue, improved gross margins and reduced general and administration expenses.
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TB Reader Poll

Previous | Published March 18, 2019

Where can you expect to see the most growth in 2019?

Tire sales
45% (34 votes)
General automotive service
15% (11 votes)
Brakes, shocks and other undercar services
7% (5 votes)
Add-on business
15% (11 votes)
Anywhere we can get it.
19% (14 votes)
Total votes: 75
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