Extraordinary loss affects Toyo's 3Q results
Toyo Tire & Rubber Co. Ltd. posted a net loss of 2.9 billion yen on net sales of 95.billion yen for the third quarter ended Sept. 30, 2013.
(The company shifted to calendar-year fiscal accounting as of 2013 from its previous April-to-March accounting. That resulted in a one-time-only nine-month fiscal accounting period last year, so there is no quarter-to-quarter comparison.)
Based on the exchange rate on Sept. 30, 2013, Toyo recorded a loss of $29.4 million on sales of $968.2 million for 3Q 2013. The company's operating income was $110.7 million (10.8 billion yen).
The company declared an 11.7 billion yen extraordinary loss to cover potential future losses resulting from an investigation by the United States Department of Justice. Toyo has been under investigation for alleged violations of the U.S. anti-trust laws in connection with automotive parts.
The 11.7 billion yen charge "is our current best estimate of all costs, expenses and fine amounts that the company may incur by the conclusion of the investigation," says the company.
Toyo adds that it has been and continues to fully cooperate with the Department of Justice in the investigation.
Through three quarters
For the first three quarters of fiscal 2013, Toyo posted net income of 6.1 billion yen on net sales of 268.2 billion yen. Its operating income was 24.6 billion yen.
In the North American market, both unit sales and net sales were favorable due
an increase in sales of the number of high-value-added tires, such as those for
SUVs, accompanying the economic recovery.
Toyo has revised its consolidated full-year forecast as follows (with the previous forecast in parentheses):
Net sales: 370 billion yen (370 billion yen).
Operating income: 32 billion yen (28 billion yen).
Net income for 4Q: 10 billion yen (17 billion yen).
The continued weakening of the yen and the impact and cost reduction effect accompanying lower raw material prices affected Toyo's full-year operating income estimate for the better.