Bridgestone revises full-year forecast upward amid Q3 'recovery'

TOKYO — Bridgestone Corp. has raised its sales and operating profit estimates for fiscal 2020 due to a recovery in the business environment following the lifting of COVID-19 restrictions.

The Japanese tire maker revised upward by 7% its revenue forecast from that issued at mid-year to roughly $27.2 billion, but this new figure is still about 17% lower than the fiscal 2019 revenue.

Bridgestone also revised its estimate for adjusted operating profit, raising it by 50% to $1.4 billion, or 5.2% of sales, from the mid-year forecast. The new estimate is 55% less than the fiscal 2019 figure.

The firm said the forecast was based on the assumption that global economic activities and the recovery in the tire market are not impacted by a second wave of CVOID restrictions in the fourth quarter.

For the three months ended Sept. 30, Bridgestone reported a 33% decline in adjusted operating profit to $656 million, on 10% lower sales of $7.6 billion.

For the first nine months of the year, corporate adjusted operating profit fell 54% to $1.1 billion, while sales were down 18.1% at $20 billion.

Tire division operating income fell 53.4% in the January-September period to $1.14 billion on 19.6% lower sales of $16.1 billion, Bridgestone's figures show. The company did not provide tire division results for the third quarter.

Bridgestone said raw materials and price/mix contributed positively to operating profit, while volumes remained below prior-year levels.

The company reported a "remarkable" recovery in demand for passenger and light vehicle tires in the U.S., Europe and China, particularly in the replacement segment, whereas Japan's recovery has been "relatively slow."

Sales in the Americas were down 7.8% in the third quarter, to $3.68 billion, which helped "ease" the year-to-date decline of 17.3%.