HYOGO, Japan — Toyo Tire & Rubber Co. Ltd.'s operating income rebounded in the quarter ended June 30, but sales fell for the second straight quarter.
After falling 12.5 percent in the first quarter, operating income was up 4.9 percent in the second period to $191.4 million. Sales fell 2.1 percent to $846.3 million.
Operating earnings for the half year, though, were off 4.7 percent to $191.4 million as Toyo continues to struggle with the burden of settling claims related to sub-par seismic isolation rubber products sold in the previous years.
Half-year sales were off 3.3 percent to $1.71 billion.
Toyo's Tire Business unit, by contrast, posted improved earnings and sales for both the quarter and six months, the Hyogo-based company reported.
Operating income for the quarter advanced 15.3 percent to $102.8 million and 5.6 percent for the half-year to $204.9 million. Tire Business sales increased 5.3 percent in the quarter to $729.3 million and 3.9 percent in the half to $1.47 billion.
As a result, the operating ratio for the Tire Business improved slightly to 14.2 percent.
Toyo's business in North America increased 3.7 percent for the half year to $852.6 million, but operating income attributable to North American operations fell 31 percent to $31.2 million.
Toyo said its replacement market unit sales in North America increased 4 percent in the six-month period.
At the same time, Toyo posted an extraordinary loss of $99.8 million to cover product compensation response measure expenses and a provision of reserves for future expenses related to the seismic isolation rubber products affair.
For the full year, Toyo has revised downward its forecast from that it issued earlier this year. Operating income likely will be on par with fiscal 2017, but this is 4.2-percent below the earlier forecast. Sales should be about 1.3 percent shy of the forecast, and roughly 2.5 percent below the 2017 figure,