HYOGO, Japan — Toyo Tire & Rubber Co. Ltd.'s fiscal 2017 operating income fell 8.1 percent from 2016 on 6.1-percent higher sales, as higher raw materials-related costs overshadowed gains in sales/mix and currency exchange rates.
Toyo also returned to the black on a net basis, after suffering a net loss in fiscal 2016 due to extraordinary charges related to the company's seismic rubber bearing business scandal.
Toyo's operating earnings fell to $404.5 million on sales of $3.61 billion, dropping the operating ratio 1.7 points to 11.2 percent.
The company's tire business unit fared slightly better, posting 1.4-percent better operating income of $411.1 million on 7.6-percent higher sales of $2.92 billion.
Toyo did not provide detailed commentary on its performance this past year, but it did disclose figures that show sales and operating income improved in North America. Revenue rose 8.8 percent to $1.66 billion, while earnings were up 12 percent to $77.3 million, raising the operating ratio marginally to 4.6 percent.
For the current fiscal year, Toyo is projecting a gain of nearly 4 percent in operating income on a 1.2-percent drop in corporate revenue. Net income should rebound measurably with the absence of extraordinary charges.
Toyo's tire business should post 6.4-percent higher sales this year, the company said, while segment earnings should rise 3.6 percent.
Toyo is forecasting continued gains in sales and operating income in North America as well – 8.6 and 26 percent, respectively.
Overall, Toyo's tire production increased 5.3 percent to 239,300 metric tons, the company reported, including a 17.4-percent jump in North America to 66,800 tons. The 2018 forecast is for a 4.6-percent gain.