Bridgestone reports increases in 1H sales and earnings
Bridgestone Corp. recorded net income of 52.9 billion yen on net sales of 1.6 trillion yen for the first half ended June 30, 2007. That compares to income of 32.8 billion on sales of 1.4 trillion yen for the first-half of 2006.
(Based on the exchange rate on June 29, 2007, Bridgestone earned $430 million on sales of $13.1 billion for the first half.)
Operating income increased 21%, to 102 billion yen, while ordinary income increased 29%, to 91.3 billion yen.
Bridgestone’s tire segment posted first-half operating income of 75 billion yen, up 30% over the first half of 2006. Sales totaled more than 1.3 trillion yen, an increase of 15%.
Here is Bridgestone's view of their results.
"A defining trend of the business environment in the first half was continued global upward movement in the cost of crude oil and other raw materials. The Japanese economy continued to recover gradually as a result of improving corporate earnings and increases in capital spending.
"In the United States, the economy showed solid expansion in the second quarter after a first quarter that showed little growth. This economic performance was based on continued strength in consumer spending, despite a significant slowdown in housing construction and residential mortgage activity.
"Economic recovery continued in Europe, supported by strong exports and increasing capital investment. Strong economic growth continued in China, while other Asian economies expanded steadily.
"Amid such a business environment, the companies continued efforts to increase production capacity in strategic product lines and continued to benefit from their strengths in research and development. Those efforts enabled the companies to provide products worldwide in a timely manner that fulfill the quality and performance requirements of customers.
"Additionally, the companies also continued group-wide efforts to enhance their portfolio of highly competitive products and businesses despite an increasingly difficult business environment caused by changes in the structure of demand and competition."
Sales in Japan increased 11%, to 658.5 billion yen over the previous first half, and operating income increased 28%, to 68.1 billion yen, despite increasing raw material costs. Unit sales of tires in the domestic market remained on a par with those in the previous first half, while unit exports substantially exceeded those in the previous first half.
In the Americas, Bridgestone's sales in the first half increased 13%, to 725.2 billion yen, "due, in part, to the exchange gain on the weaker Japanese yen." Operating income decreased 6%, to 18.8 billion yen, "due, in part, to high raw material costs and an increase of costs associated with expanding operations."
Unit sales of passenger car and light truck tires remained unchanged from the previous first half, and unit sales of truck and bus tires declined over the previous first half due mostly to a decrease of OEMs sales. However, dollar sales exceeded the previous first half's results.
Sales in Europe increased 26%, to 251.9 billion yen "due, in part, to the exchange gain on the weaker Japanese yen." Operating income was up 21%, to 7.9 billion yen "despite increasing raw material costs."
Unit sales of passenger car and light truck tires grew steadily, while unit sales of truck and bus tires increased significantly over the previous first half.
In other regions, sales grew 25% to 262 billion yen, while operating income increased 81%, to 17.2 billion yen.
"In Japan, management expects unit sales of tires for the domestic market in 2007 to remain on par with the prior year," says Bridgestone. "They also project unit exports of tires to exceed those in 2006.
"In the Americas, management projects unit sales of passenger car and light truck tires to remain on par with the prior year. They also project a decline in unit sales of OE truck and bus tires versus the prior year due to the extraordinary demand in 2006 for new truck and bus tires spurred by 'pre-buy' activities in advance of new environmental regulations which took effect in January of this year.
"In Europe, management expects unit sales gains in passenger car, light truck, truck and bus tires over the prior year.
"The operating environment is expected to remain challenging despite burgeoning tire demand, particularly overseas. Profitability is still an issue, however, as the cost of raw materials used in the companies' products remains high," adds Bridgestone.
The company's board of directors declared an interim dividend of 13 yen per share. Management also revised its dividend projection for the second half to 13 yen per share, and for the full year to 26 yen per share.