Tire makers reported increased sales for the third quarter, ended Sept. 30, thanks to higher pricing. However, earnings performance was mixed.
Market uncertainties, inflation, a semiconductor shortage disrupting vehicle production, COVID-19 lockdowns in China and the war in Ukraine impacted tire makers' operations in the quarter and the first nine months of the year.
Bridgestone Corp. raised its full-year business outlook following "significant increases" in both revenue and operating profit for the first nine months of fiscal 2022, despite the business environment being "volatile and uncertain."
Bridgestone said it expects its full-year adjusted operating profit to come in about 4.4% higher than its earlier estimate.
Bridgestone said it expects operating income of about $3.67 billion on sales of nearly $31 billion.
Commenting on the year to date, Bridgestone said in addition to the suspension of production in Russia and exports to the country, it experienced a "significant" drop in sales in China due to lockdowns, and the temporary stoppage of operations due to a cyberattack at its U.S. subsidiary.
The group registered increased sales of all products, including passenger car/light truck tires, truck and bus tires, and mining and construction tires, over the prior-year levels.
Bridgestone finished the first nine months with adjusted operating profit up 19% year-on-year at $2.48 billion, on 28% higher sales of $21.5 billion.
Goodyear suffered a 44% drop in pre-tax operating income for the quarter, as energy and raw material costs increased and global tire volume dropped.
The company's EBITDA fell to $116 million in the quarter, while sales revenue increased 7.6% to $5.31 billion. Net income dropped 67% to $44 million.
The tire maker said it expects current headwinds to continue into the fourth quarter of 2022 and the first quarter of 2023 before there is any expectation of market settlement.
Through the first three quarters of 2022, sales jumped 24.2% to $15.4 billion, with net income up 45% to $308 million.
The Americas continue to lead the way for Goodyear, with a $337 million increase in net sales for the third quarter, or an increase of 11.4% year-over-year.
Hankook Tire & Technology Co. Ltd. reported a 6.4% increase in operating profit for the quarter on 26% higher sales, due mainly to strong pricing and the impact of foreign-exchange rates.
Operating profit increased to $143.7 million on sales revenue of $1.72 billion, Hankook said.
Sales of OE and larger rim-diameter (18 inches and above) tires contributed to strong financial performance, Hankook said, while the replacement tire sector experienced a "slight downturn in demand."
Global sales of larger diameter tires accounted for 41% of the company's total passenger car tire sales, up 4.7 percentage points from the 2021 third quarter.
For the nine months ended Sept. 30, Hankook reported an 11% drop in operating earnings to $368 million, on 16.7% higher sales of $3.93 billion.
For the full year, Hankook said it was aiming for a double-digit growth.
Group Michelin reported 20.5% higher sales revenue for the nine-month period, despite lower unit sales volume for the period, in part due to the impact of Russia's invasion of Ukraine.
Michelin did not report earnings for the period, but said it is sticking with its earlier operating earnings forecast for fiscal 2022 of slightly above $3 billion.
Michelin stressed that its forecast takes into account a "highly inflationary" environment shaped by continuing operational disruptions, widespread inflation and limited visibility as to future demand.
Michelin is projecting that passenger and light truck tire markets worldwide could end the year flat compared with 2021, with a potential swing of +/- 2%, while truck tire markets (excluding China) should expand by 2% to 6% and specialty tire markets growing by 3% to 7%.
For the nine-month period, Michelin's sales rose to $22.1 billion; for the third quarter, the increase was 23% to $7.5 billion.
While Michelin's unit sales to customers was down slightly in the period, the company said end-user demand held firm in most regions and markets. In response, the company said it is "steering operations to ensure adequate inventory levels."
Sumitomo Rubber Industries Ltd. (SRI) reported an operating loss in the third quarter, the firm's second straight quarter with an operating loss.
Sumitomo cited Russia's invasion of Ukraine, COVID-19 lockdowns, high costs and a general slowdown in economy as reasons for continuing pressure on margins.
The third-quarter operating loss of $19.6 million contributed to a 66.9% drop in operating income for the January-September period, to $76.6 million, SRI's financial figures show.
Sales revenue, in contrast, jumped 24.2% in the quarter to $1.95 billion and 18.9% in the nine-month period to $6.11 billion.
As a result of the performance thus far in 2022, Sumitomo revised downward its earnings forecast for the full fiscal year by nearly 60% to roughly $100 million, or about 1.2% of sales, in contrast with 5.6% in fiscal 2021. SRI also cut its sales forecast for the year by 4%, although full-year revenue will still be 17.5% greater than a year ago.
Titan International Inc.'s pre-tax operating income jumped nearly 75% in the third quarter, a performance company management attributed to increased sales and improvements in gross-profit margins.
Adjusted EBITDA rose 74.3% to $61 million on 17.8% higher sales of $530.7 million. Net earnings quadrupled to $42.7 million.
The positive results prompted management to project Titan will report record sales and earnings for the full fiscal year and perhaps beyond, according to Paul Reitz, president and CEO, who added: "We continue to believe the key elements are in place to drive continued positive momentum for the business."
In addition, management noted that Titan is on track to achieve its highest free cash flow in the company's history.
Reitz said all of Titan's businesses — agricultural, earthmoving and consumer — registered double-digit growth and solid earnings in a business climate he described as "swimming with noise."
In the ag sector, Titan's largest, Reitz noted that farmers are in a good financial position and recent U.S. Department of Agricultural reports indicated that corn and soybean supply-demand will support good pricing into 2024, at a minimum.
Toyo Tire Corp. has revised downward its full-year operating income forecast following a sharp drop in earnings in the third quarter and first nine months of 2022.
Operating income for the quarter plunged 57.3% to $39.3 million on 31.5% higher sales of $918.6 million. Net income rose 67.7% to $99.6 million.
For the nine-month period, Toyo's operating income was off 20.9% to $245.2 million on 23.9% higher sales of $2.73 billion. Net earnings were up 55.1% to nearly $350 million.
For the full year, Toyo reduced its earnings forecast 20% from that issued earlier in the year to roughly $315 million, or about 8% of sales. This compares with the 13.5% ratio recorded in fiscal 2021 and 10% in the earlier forecast.
Nasdaq Stockholm has orderd Trelleborg A.B. to pay a fine of four annual fees for failing to disclose information on its sale of Trelleborg Wheel Systems to Yokohama in December 2021.
Trelleborg Wheel Systems reported double-digit gains in earnings and sales for the quarter and nine-month period, largely due to higher selling prices enacted throughout the year to counter increased costs for raw materials and energy.
The Trelleborg A.B. operating unit, which is being sold to Yokohama Rubber Co. Ltd., reported a 29.8% jump in operating income for the quarter to $29.3 million on 33% higher sales of $299 million, despite weakening aftermarket demand for agricultural tires in Europe.
Buoyed by the impact of higher selling prices and increased sales volumes, Yokohama Rubber Co. Ltd. (YRC) posted double-digit gains in operating income and sales in Q3.
The company reported 72.2% increased operating profit for the period of $133.2 million on 43.2% higher sales of $1.62 billion. YRC cited the positive effects of an improved price/mix component, higher sales volumes and exchange-rate differences for the earnings gains.
Despite the positive gains in the quarter, Yokohama did not change the full-year fiscal 2022 projections it announced in August, which call for sales revenue of about $6.8 billion and an operating ratio of 7%. The profit projection comes up nearly 28% short of the fiscal 2021 results, despite 27.5% projected higher sales.
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