TOKYO — Bridgestone Corp. has 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."
Tokyo-based Bridgestone said it expects its full-year adjusted operating profit to come in about 4.4% higher than its earlier estimate, which when compared with slightly higher revenue, will yield an operating ratio of nearly 12%, up a half point from the earlier projections.
By the numbers, 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.
Furthermore, the group noted that an economic slowdown, mainly in the U.S. and Europe, was becoming apparent coming into the second half.
Despite the "harsh business environment", Bridgestone said its "premium business strategy" and "price management" helped it respond to the sharp rise in raw material prices and rising costs from inflation.
Furthermore, 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.
In terms of costs, Bridgestone said it improved profitability by continuing its "expense and cost structure reformation," which included improvements at a number of manufacturing sites.
"As a result, the group's business performance over the nine-month period, which included the effects of the weak yen, was marked by significant increases," it said.
For the fourth quarter, Bridgestone said it envisaged the business environment to remain unfavorable as a result of "a downturn in global tire demand due to the economic slowdown and further acceleration of inflation."
"However, through continued strengthening of 'premium business strategy, and 'price management,' we expect to secure firm profitability," it added.
Bridgestone finished the first nine months of the year strong, with adjusted operating profit up 19% year-on-year at $2.48 billion, on 28% higher sales of $21.5 billion.
The company attributed the sales increase to the positive effects of price/mix ($1.72 billion), higher volumes ($260 million) and the positive impact of currency translation ($399 million), which helped offset higher costs of raw materials and operating expenses.
In terms of geographical performance, all regions posted positive developments:
- The Americas region posted 28% higher adjusted operating income of $1.36 billion on 37% higher sales of $10.4 billion;
- The Europe, Russia, Middle East, India and Africa region reported 81% growth in adjusted operating profit to $420 million on 27% higher sales of $4.67 billion;
- In Japan, the group saw adjust operating profits rise 34% on 22% higher sales;
- The China/Asia-Pacific region was the only region to register a decline in operating profit, down 15%, despite 22% higher sales.
In terms of products, all segments posted revenue growths of above 30%, led by specialties – including off-road, farm, aviation and mining tires – which saw adjusted operating profit increase 69% to $673 million on 37% higher sales of $2.9 billion.
The truck and bus segment posted 30% higher sales of $5.5 billion with a 13% better adjusted operating profit of to Yen757 million, and adjusted OP by 13% of $570 million.
The consumer tire segment posted 32% higher sales of $11.6 billion, with 13% better operating income of $1.4 billion.