Yokohama Rubber Co. Ltd.'s net sales for the interim fiscal period ended Sept. 30 totaled 222.4 billion yen, an increase of 10.5% over the same period in 2005. However, Yokohama's net income dropped by nearly 75% to 3.4 billion yen.
Yokohama credits sales gains to growth in its North American and Asian tire business.
"The decline in operating income resulted from rising prices for raw materials," say Yokohama officials.
"Yokohama recorded a tax benefit in the first half of the previous fiscal year, and the absence of a corresponding gain in the first half of the present fiscal year amplified the decline in net income."
More specifically, Yokohama's Tire Group achieved an 11.5% gain in sales to 162.5 billion yen. However, the Tire Group's operating income fell nearly 70% to 1.1 billion yen, "reflecting the rising prices for natural rubber and other raw materials."
Yokohama management believes that the upward trend in raw material prices is subsiding, and as a result has raised its full-year projections for sales, operating income, and net income previously announced on Aug. 9.
Revised projections call for net sales to increase 8.6% over the previous year to 491 billion, up 1.2% over the August projections; for operating income to decline 4.3% to 21 billion; and for net income to decline 46.4% to 11.5 billion yen.