Bridgestone Q1 sales, earnings up double-digits

TOKYO — Bridgestone Corp. reported double-digit growth in sales and profits for the quarter ended March 31, due mainly to the group's "strategic price management" and improved sales mix.

The company posted a 16% increase in adjusted pre-tax operating profit jumped 15.5% to $882.8 million on 17.1% higher revenue of $7.89 billion, leaving the operating ration unchanged at 11%. Net earnings jumped 38.6% to $685.2 million.

Bridgestone said an improved sales mix, helped by a weaker yen, "fully offset" the negative impact of higher raw materials prices and inflation caused by energy and labor costs.

The company's revenue increase was linked to an improved sales mix of premium passenger tires, especially those of larger rim diameter (18-inches and larger) in each region as well as a 10% gain in revenue from sales of large off-highway tires. Bridgestone said.

The increase in revenue overshadowed measurable drops replacement market unit sales volume in Europe and North America, reflecting the economic slowdowns in those regions.

Bridgestone said it expects demand to recover in the second half of the fiscal year, but management did not revise the firm's cautious outlook for the full fiscal year that is issued in February. The Tokyo-based company said its approach of pursuing increases in both unit volume and pricing will continue throughout the year.

Despite the drops in unit volume sales, Bridgestone's operations in Japan and the Americas reported strong growth both in sales and operating profit. The European and Asia-Pacific operations reported profit declines.

• Sales grew 26.7% in the Americas to $3.74 billion — despite demand drops of 8% and 10%, respectively, in the replacement consumer and commercial tire sectors — with adjusted operating profit up 25% to $408 million, or 11% of sales.
• Operating income reported by the Europe/Middle East/India/Africa business unit fell 65.8% on 10.1% higher sales of $1.71 billion.
• In Japan, adjusted operating profit rose 38% on 13% higher sales, and in China/Asia-Pacific, profits were down 19% as revenue grew 12%,

Bridgestone's various tire segments reported growth in profits, led by specialties – off-road, aircraft, farm and two-wheeler tires – which reported a 49.8% rise in profits to $242.6 million on 25.6% higher revenue of $1.11 billion.

The consumer tire segment posted a 6% increase in adjusted operating profit if $431.6 million on 19.6% higher sales of $4.29 billion, which dropped the operating ratio a point to 10%.

Operating profit in the truck/bus segment grew 14.2% to $182.2 million on up 8.3% higher revenue of $1.91 billion.

The group's diversified products business — industrial products, air springs and sports — reported a 2% decline in adjusted operating profit on 15% higher sales.