TOKYO — Bridgestone Corp. is maintaining its 2022 financial outlook as sales and earnings for the quarter ended March 31 grew by double digits.
Adjusted operating profit for the quarter was up 19.2% to $869 million on 23.5% higher sales of $7.67 billion, yielding an operating ratio of 11.3%. Net income was up 3.4% to $563 million.
Higher sales were achieved through "strengthened selling price management" and "premium business strategy," Bridgestone said, in response to unprecedented raw material costs and inflation.
A rise in replacement tire demand offset a decline in the OE segment, which continued to suffer from semiconductor shortages within the automotive industry.
The tire maker saw passenger tire sales improve "significantly" in Japan due to a "pre-buy" option offered prior to price hikes. In Europe and the U.S., replacement sales remained strong despite price increases.
Bridgestone reported double-digit revenue gains in all of its geographic operating units, led by 26% growth in the Americas and Europe/Middle East/India/Africa segment, to $3.36 billion and $1.77 billion, respectively.
Business in Japan grew 21%, ahead of the Asia-Pacific/China segment at 14%.
Revenue within the passenger tire unit increased 24.6% to $4.14 billion, while adjusted operating income remained flat at $492 million.
Higher sales of larger rim-diameter (18-inch and greater) contributed heavily to the revenue growth, Bridgestone noted. OE demand was down sharply.
The operating margin was down 2.8 percentage point to 11.5%, due mainly to rising costs, the company said.
The company noted that while the North American replacement market was up 12% over 2021, sales volumes still lagged behind those in 2019 by about 5%. OE volume is still 15% below the 2019 (pre-pandemic) level.
In the truck and bus tire segment, revenue grew 23.6% to $1.89 billion, on the strength of buoyant replacement sales in the U.S. and Europe driven by "robust construction and transportation demand."
In Japan, the pre-buy option buoyed truck tire sales.
Segment operating profit rose 2.9% to $190 million, dragging the operating margin down nearly two points to 9.7%.
In North America, Bridgestone noted replacement market sales of truck/bus tires were up 9% over 2021 but also 24% over 2019.
In the specialties segment — including mining, farm, aircraft and two-wheeler tires — sales grew 31.4% to $981 million, while the operating profit increased 37.4% to $202 million.
Bridgestone noted the adjusted operating profit was buoyed by $542 million in price/mix effects and $215 million from higher unit volumes.
Offsetting these positives were nearly $500 million in higher raw material costs and $198 million in higher operating expenses, which included the rise in ocean-freight costs and upgrading projects at production sites. Freight costs alone grew by nearly 47% over the corresponding fiscal 2021 period.
The diversified products business unit posted revenue of $568 million and adjusted operating profit of $30.1 million.
Bridgestone maintained its earlier projections for the full year — 12% higher revenue and 8% better earnings versus fiscal 2021 — saying a "favorable" price impact would "absorb almost all unfavorable impacts from raw materials."