TOKYO — Bridgestone Corp. has revised upward its fiscal 2021 sales and operating profit forecast due to strong first-half results and the softening of the COVID-19 impact on global businesses.
Based on 24.2% growth in sales and a five-fold increase in operating profit for the six months ended June 30, Bridgestone raised its forecasts for full-year operating profit and sales by 38.5% and 10.3%, respectively, over what it projected in February, yielding an operating ratio of nearly 11%.
In disclosing the more optimistic forecast, Tokyo-based Bridgestone noted countries around the world are making progress in addressing the COVID-19 pandemic and carrying out vaccination programs.
The company's earlier forecast was based on the assumption that the global economy wouldn't return to pre-COVID levels until 2023 and that global tire demand would remain low.
"As a result, global tire demand in the first half of 2021 has shown a dramatic recovery at a pace exceeding the group's expectations," Bridgestone said.
For the first six months of the year, Bridgestone reported adjusted operating profit of $1.6 billion on sales of $14.3 billion, with earnings growth aided by the group-wide expense and cost restructuring program.
The tire segment mirrored the corporate performance with 24% sales growth, to $12.3 billion, and a nearly four-fold jump in operating income to $1.73 billion, which equates to an operating ratio of 14%. All of the segment's operating units posted sales gains of 20% or more.
In particular, Bridgstone noted that demand for truck and bus tires and construction vehicles grew significantly, underpinned by solid construction and transport demand. That helped fuel 170% growth in operating profit and 24% higher sales in the truck/bus tire business to $375 million and $3.38 billion, respectively.
The consumer (passenger and light truck) tire segment reported an 11-fold jump in operating profit to $1.02 billion on 25.5% higher sales of $16.5 billion. Demand for replacement tires returned to the pre-pandemic levels of 2019.
The firm's specialties business unit — covering construction, farm, aircraft and two-wheeler tires — reported a 39% rise in operating profit to $328.8 million on 19.7% higher sales of $1.74 billion.
Viewed by geographical reporting segment, business in Europe/Middle East/India/Africa improved the most, jumping 37% to $3.02 billion, followed by the Americas (up 27.3% to $6.12 billion) and China/Asia-Pacific (up 25.5% to $1.69 billion).
The group's diversified products segment reported an adjusted operating loss of $20 million on revenue of $1.64 billion, with a $57 million operating loss in the chemical and industrial products businesses dragging earnings down.