ITAMI CITY, Japan — Toyo Tire & Rubber Co. Ltd.'s operating income for the half-year ended June 30 fell 16.7 percent despite 3-percent higher sales.
Operating earnings fell to $194.3 million on sales of $1.71 billion, dropping the operating ratio nearly three points to 11.4 percent. Net income quintupled to $98.5 million.
Toyo cited elevated raw materials prices as the main reason for the lower first half earnings.
Despite the first-half earnings drop, Toyo has revised upward by 6.4 percent its profit forecast for the full year based on more favorable expectations for reduced raw materials costs in the second half.
Toyo's tire division performance paralleled that of the parent company — earnings down 11.9 percent to $109.8 million on 3.6-percent higher sales of $1.37 billion.
For the full fiscal year, Toyo is projecting its tire business will generate $2.88 billion in sales, a 6.6-percent improvement over 2016 and 1.6 percent better than the firm's earlier forecast. Operating income should finish the year 9 percent ahead of 2016.
The company's businesses in North America generated operating income of $50.7 million (up 22.7 percent) on sales of $795.2 million (up 3.7 percent) in the first half, performances that are expected to continue in the second half.