TOKYO — Bridgestone Corp. has revised upward its financial forecast for fiscal 2020 based on better-than-expected fourth quarter demand in many markets.
Bridgestone said it now expects to report adjusted operating profit 48% greater than the forecast from mid-November, along with 3.5% higher sales.
Compared with fiscal 2019, however, operating income will be nearly 34% shy of the previous year's performance, while sales will be 14.7% lower. The company expects to report a net loss of nearly $225 million, compared with net income of over $2.2 billion in 2019.
The company said its previous forecast was based on the assumption that the fourth quarter would be "significantly affected by a decline in demand due to the resurgence" of COVID-19.
"However, in the end, the impact of the decline in demand was limited and the demand recovery trend of mainly truck and bus tires from the third quarter continued. Therefore, we significantly exceeded the planned tire sales at the time. …"
The new projections are: $2 billion in operating income and sales of $28 billion. The increase in operating income will improve the operating ratio more than two full points to 7.4%.
Broken down by segment, Bridgestone said:
- Demand for car and light truck tires in Europe and the U.S. "softened slightly" from November onward due to a resurgence in the spread of COVID-19;
- Sales of large-diameter passenger tires were strong during the fourth quarter and the "demand recovery trend" for OE tires continued;
- Replacement demand for truck and bus tires was "particularly firm" and recovered above the level of the previous year, despite the resurgence of COVID-19.
- In the OTR tire segment, "operating conditions varied, depending on the mineral," resulting in demand weakness for ultra-large mining tires, but demand for small and medium tires, mainly for construction applications, "recovered significantly" from the drop in demand in the first half.
