Yokohama Rubber Co. Ltd. posted net income of 5.6 billion yen on net sales of 127.7 billion yen for the first quarter ended March 31, 2013. That compares to income of 8.8 billion yen on sales of 135.3 billion yen for the same period in 2012.
Based on the exchange rate on March 31, 2013, net income was $59.4 million on net sales of more than $1.3 billion for 1Q 2013. The company's income-to-sales ratio was 4.3%.
Operating income was down 18.1%, to 7.6 billion yen ($80.7 million).
Yokohama attributed the downturn in sales and earnings chiefly to "weakening sales of tires in the Japanese original equipment market and in Yokohama's principal markets overseas."
Tire operations
In Yokohama's tire operations, sales declined 6.6%, to 100.1 billion yen, and operating income declined 27.6%, to 5.7 billion yen.
Japanese demand for original equipment tires declined following the expiration of government incentives for purchases of fuel-saving, low-emission vehicles. In addition, tire demand was generally sluggish in North America, Europe and China. Yokohama's sales were basically unchanged in the Japanese market for replacement tires.
The company posted vigorous sales in winter tires and launched successful new summer tires.
Fiscal 2013, first half projections
Yokohama projects that net sales in the six months to June 30, 2013, will increase 9.7% over the same period in 2012, to 295 billion yen. Net income will decline 5.1%, to 13 billion yen.
The company is projecting operating income to increase 0.5%, to 20 billion yen.
Left unchanged is Yokohama's previously announced full-year projections for record sales (630 billion yen), net income (36 billion yen) and operating income (59 billion yen).
Underlying those projections are expectations of a strong recovery in overseas tire sales in the latter half of the year.
