KOBE, Japan — Sumitomo Rubber Industries Ltd. (SRI) reported a rebound in operating income for the quarter ended Sept. 30 on 6.7% lower sales, but the firm's results year-to-date continue to lag the 2019 performance measurably due to the "extremely harsh" economic conditions in the first half.
For the period, Sumitomo reported operating income of $89.5 million, up 44% over 2019, while sales were off 6.7% to $1.89 billion. Net income was $23.6 million, up 56% versus the 2019 period.
SRI said the business environment remained "extremely severe" during the quarter, as the economic downturn due to the impact of COVID-19 caused the sales environment to deteriorate significantly, and the appreciation of the Japanese Yen against the emerging country currencies continued.
At the same time, the prices of natural rubber and petroleum-based raw materials fell and remained low.
SRI's tire division reported similar results, with operating income up 22.9% to $81 million on 7.7% lower sales of $1.6 billion.
Sales revenue attributed to original equipment business was off both domestically and internationally, SRI said, as vehicle makers worldwide struggled to get build rates back up.
Thus far in the second half of the year, the pace of market recovery varied by region, SRI said. One bright spot was demand for high-performance products in China and North America, where market conditions had recovered quickly.
For the January-September period, SRI's operating income dropped 71.7% to $60.5 million on 16.1% lower revenue of $5.03 billion.
Tire division operating income from the nine-month period dropped 61.1% to 71.6 million on 16.4% lower sales of $4.29 billion.
Sales in North America for the three quarters were off 2.5% to $1.05 billion.
Due to signs of improvement in some markets, SRI revised upward by about 3.3% its fiscal 2020 sales projection.