Bridgestone cited higher operating expenses
Bridgestone Corp. reported lower operating income for the quarter and nine months ended Sept. 30, prompting the company to reduce its fiscal 2018 earnings projections about 2 percent from the August forecast.
Bridgestone cited higher operating expenses, lower sales volumes, foreign exchange losses and an unfavorable price/mix component for the reduced earnings. These factors offset an 18- percent reduction in raw materials costs.
The revised forecast calls for operating income of $4.27 billion, a drop of nearly 4.7 percent from the August projection and roughly 2 percent below the fiscal 2017 performance, the company’s figures show. The revised revenue figure is slightly off the August forecast but still ahead of the fiscal 2017 number.
For the third quarter, Bridgestone’s operating income was off 6.1 percent from the 2017 quarter to $830.9 million on 2.3-percent lower sales of $8.17 billion. For the nine-period, operating income fell 3 percent to $2.54 billion on a 0.4-percent sales increase to $24.3 billion.
In the third quarter, particularly, Bridgestone said weakness in Latin American currencies and one-off costs to restructure the diversified products business negatively affected operating income.
In the company’s tire business, the quarterly operating income was unchanged at $813.6 million on 2.4-percent lower sales of $6.81 billion. For the nine months, operating income rose 2.1 percent to $2.55 billion on 0.7-percent higher sales of $20.2 billion, increasing the operating ratio slightly to 10.9 percent.
From a regional perspective, the Americas segment reported lower operating income for the three- and nine-month periods on marginally lower sales revenue.
In the tires business, revenue was up due to promotion activities, Bridgestone said, noting growth in sales for large-rim size tires and large OTR tires.
Additionally, the company said it is raising prices in Americas and Europe “to keep appropriate price positioning.”