Bridgestone's 1Q sales rise 3.6%, but net income falls 18.5%

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Bridgestone Corp. reported net income of 22.9 billion yen on net sales of 797.8 billion yen for the first quarter ended March 31, 2008. That compares to income of 28.1 billion yen on sales of 769.9 billion yen for the same period in 2007.

Based on the currency exchange rate on March 31, 2008, Bridgestone posted net income of $230 million on net sales of $8 billion. The company's income-to-sales ratio was 2.8%.

Although the company did not specifically address reasons for its 18.5% decrease in net income, Bridgestone said "a defining trend of the business environment in the first quarter was the persistent upward movement in the cost of raw materials and other materials, combined with rising energy costs." Also, there were "changes in the global structure of demand and competition" that have resulted in "an increasingly difficult business environment."

Bridgestone's 1Q 2008 operating income was 52.4 billion yen, up 1.7% compared to 1Q 2007.

Tire segment sales, which account for nearly 82% of Bridgestone's net sales, were up 4.4%, to 651.2 billion yen. The segment's operating income was up 9.1%, to 44.3 billion yen.

Bridgestone's financial results by geographic segment are as follows:

The Americas: sales, 336.5 billion yen; operating income, 7.7 billion yen. Sales remained on par with the previous first quarter, while operating income dropped 30%.

Japan: sales, 328.8 billion yen; operating income, 24 billion yen. Sales were comparatively up 4%, while operating income was down 19%

Europe: sales, 126.6 billion yen; operating income, 1.1 billion yen. Sales were up 5%, while operating income decreased 75%, "due, in part, to increasing raw material costs and sales expenses."

Other: sales, 143.3 billion yen; operating income, 11.5 billion yen. Sales and operating income were up 14% and 28%, respectively.

For its fiscal 2008 (and using Bridgestone's assumed exchange rate), Bridgestone projects net sales of 3.56 trillion yen ($32.3 billion), net income of 90 billion yen ($818 million) and operating income of 195 billion yen ($1.77 billion).

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