TOKYO (Nov. 10, 2015) — Yokohama Rubber Co. Ltd. (YRC) suffered drops in operating and net income for the nine months ended Sept. 30, based largely on sluggish sales in Japan and effects of escalating price competition.
Yokohama said operating and net earnings fell 4.4 and 25.7 percent, respectively, to $252 million and $151 million. The drop in operating profitability occurred despite declining prices for raw materials and a weakening yen.
Sales rose 3.2 percent to $3.67 billion on the strength of robust tire unit growth in North America and expanding sales volume in China and Russia, YRC said.
Yokohama's tire segment operating income fell 10 percent to $184.3 million, while sales grew 3.3 percent to $2.88 billion. Negatively affecting revenue were lower sales in Japan, where aftermarket declines reflected the aftereffects of the April 2014 hike in Japan's national sales tax and diminished demand for winter tires following a lighter-than-usual snowfall in the Tokyo region. OE demand also fell along with lower Japanese vehicle production.
YRC did not disclose regional results.
The escalating competition in the tire segment prompted Yokohama management to downgrade the company's fiscal 2015 earnings projections from August, with operating income now expected to fall 6.9 percent short of the fiscal 2014 level and net income down 18.5 percent.