HYOGO, Japan — Toyo Tire Corp. reported double-digit gains in sales and earnings for the quarter and nine months ended Sept. 30, prompting company management to raise their expectations slightly for the full fiscal year.
Third-quarter operating income rose four-fold to $171.4 million on 13.4% higher sales revenue of $998.4 million, raising the operating ratio to 16.5%. Toyo cited falling ocean freight costs and favorable foreign-exchange rates for the improved earnings.
As a result, Toyo raised its earnings forecast for fiscal 2023 by 8% to roughly $470 million, which would raise the operating ratio to 11.6%, nearly three points higher than the fiscal 2022 margin.
Toyo's tire segment — which represents over 90% of the firm's corporate revenue — reported a nearly four-fold increase in operating income during the quarter on 13.3% higher sales of $914 million. That performance helped raise the unit's operating earnings for the nine-month period by 49% over the comparable 2022 period to $364 million on 16.9% higher sales of $2.71 billion.
Toyo's sales increase for the January-September period was driven primarily by increased business in North America. The company's figures show revenue generated in North America jumped 18.4% to $1.95 billion, or nearly 66% of total corporate sales.
On a unit sales basis, Toyo's data show the tire business in North America was up 8% for the first nine months and should end the year 7% percent as the growth is expected to cool in the fourth quarter.
The company's figures also show global tire production at the firm's factories in Asia and the U.S. are running slightly behind their 2022 output, while the new factory in Serbia ramps up from about 500,000 units a year ago to a projected 7.5 million this year.