KOBE, Japan — Sumitomo Rubber Industries Ltd. (SRI) reported an 8.8% drop in operating income in the quarter ended March 31 on 17.2% higher sales,
Operating income for the quarter slid to $122.2 million on sales of $2.16 billion, yielding an operating ratio of 5.7%, down from 7.3% a year ago. Net earnings rose 10.3% to 101.5 million.
Sumitomo cited negative factors such as the shortage of semiconductors, disruption of global logistics and the impact of soaring freight costs and rising raw-materials prices for the earnings decline.
On the other hand, sales grew as markets in the U.S. and Europe recovered from the year-ago period and SRI was able to export more in light of a weakening Japanese versus other currencies,
For the full fiscal year, SRI continues to abide by its earlier forecast for operating income of about $365 million, while sales revenue is expected to increase nearly 9% over the previous forecast — and nearly 22% over fiscal 2021 — to about $10 billion.
Sales revenue in the tire business increased 16.9% from the 2021 quarter to $1.81 billion, but the business unit's profit decreased 20.5% to $90 million, SRI said.
Tire-related sales in North America grew 31% to $415 million, leading the way among the company's geographical segments. Europe's sales grew 21.5% while those in the home market of Japan were essentially flat.
SRI said it achieved revenue growth in North America despite lower unit sales of predominantly lower-profit products in light of soaring freight costs. This resulted in an improved product mix.
Unit sales and revenue grew in Europe, SRI said, as the markets there responded to racing-related promotional efforts.
Revenue in the Asia/Pacific region fell due to sluggish sales in China and Indonesia, which experienced COVID-related travel and business restrictions.
