Yokohama posts increases in 1Q income, sales
Yokohama Rubber Co. Ltd. announced net income of 1.5 billion yen on net sales of 96.2 billion yen for its fiscal first quarter ended June 30, 2005. That compares to income of 986 million yen on sales of 91 billion yen for the same period last year.
Based on the Aug. 9, 2005, exchange rate, Yokohama's fiscal 2006 first-quarter net income and sales were $13.4 million and $859 million, respectively. The company's net income was 1.6% of net sales.
Yokohama says the 5.7% increase in net sales reflects "a rise in domestic and overseas sales of tires and expanded sales of Multiple Business Group products, centered on industrial materials and aircraft components." The company attributed the 51.8% increase in net income "mainly... to a decreased evaluation loss on marketable securities and lower pension and severance costs."
However, a jump in raw materials costs and increased selling, general and administrative expenses caused operating income to drop 14.7%, from 3.3 billion yen in the first quarter of fiscal 2005 (ended June 30, 2004) to 2.8 billion yen.
In the Tire Group, sales expanded 5.2%, to 69.9 billion yen, on the strength of favorable sales overseas, particularly in North America and Europe. Domestic tire sales grew steadily, says the company.
Segment operating income declined 12.7%, to 2.9 billion, reflecting rising raw materials costs and startup expenses related to the establishment of production facilities in Asia.
Sales of the Multiple Business Group rose 6.9%, to 26.3 billion yen, owing to improved demand for aircraft components, conveyor belts and marine hoses. A segment operating loss of 32 million yen, compared with operating income of 10 million yen in the first quarter of fiscal 2005, stemmed from increased raw materials costs and a decrease in sales of golf products.
For its fiscal 2006 first-half (April 1 to September 30, 2005) and full-year (April 1, 2005, to Mar. 31, 2006) forecasts, Yokohama predicts the following results:
First-half: net sales, 195.5 billion yen; net income, 12 billion yen; operating income, 4.5 billion yen.
Full-year: net sales, 445 billion yen; net income, 22 billion yen; operating income, 24 billion yen.
The forecasts are revised from the totals the company released on May 12. Yokohama says the changes reflect "tax benefits realized in the first half resulting from a loss on the valuation of stocks of a consolidated North American subsidiary closed during the previous fiscal year."