TOKYO — Bridgestone Corp.'s first-quarter operating income dropped 22.8 percent on 1.3-percent lower sales on the negative effects of higher raw materials costs and an ongoing restructuring in Bridgestone's diversified products unit.
Operating income fell to $699.6 million, while sales fell to $7.7 billion, with both tires and diversified products units posting lower sales for the period ended March 31. As a result, the operating ratio fell 2.5 points to 9.1%.
Net income fell 4.8% to $548 million.
Bridgestone is restructuring its diversified products operations — which produces conveyor belts, hydraulic hoses, rubber tracks, seismic shock-absorbers, automotive parts, construction materials, sports equipment, etc. — to focus more on "solution" packages, the company said last year.
The tire division suffered a 17.4% drop in operating income to $721.4 million on 1% lower sales of $6.44 billion. Globally, Bridgestone reported 3% lower consumer (passenger/light truck) unit sales, versus 1% higher commercial tire sales and 15% higher ultra-large OTR tire sales.
The Americas business unit saw operating income slide 21.4% to $303.1 million on 0.3% higher sales of $3.72 billion.
Bridgestone reported U.S. replacement market passenger/light truck tire sales were flat with the 2018 quarter while commercial tire sales were down 6 percent. In the original equipment segments, the trend was reversed — consumer tire sales down 14% and commercial tire sales up 16%.
Elsewhere, revenue in China and Asia-Pacific dropped 4%.
For the full fiscal year, Bridgestone is projecting a 17% drop in operating income on 2% lower sales.