Bridgestone First-Half Operating Profit 21% Higher
Top Japanese tire maker Bridgestone posted a 21.3% rise in half-year operating profit as the yen weakened and sales grew, especially in higher-margin segments, and tweaked its recently increased forecasts for the full year.
Operating profit for January-June was 102.01 billion yen ($852.6 million) while net profit rose 61.3% to 52.94 billion yen, the Tokyo-based company said on Thursday.
Revenues grew 13.4% to 1.62 trillion yen, partly due to the addition of sales from Bandag, a U.S. supplier of retread tires that Bridgestone acquired earlier this year.
Bridgestone has said its profits this year will be pressured by high raw materials prices and heavy spending to finance rapid capacity expansion worldwide.
French rival Michelin last month also reported a big improvement in first-half income, driven largely by solid demand in Europe, South America and Asia.
Restructuring U.S. tire maker Goodyear Tire & Rubber Co. reported an improvement in the latest quarter, but expects to be hit by shrinking demand for commercial truck tires in North America.
In late June, Bridgestone raised its 2007 operating and net profit forecasts to account for a sharp drop in the yen's value beyond its initial assumption of 110 yen to the dollar and 140 yen to the euro.
On Thursday the rate was around 119.65 yen to the dollar and 165.10 yen to the euro.
It raised the forecasts again on Thursday, with operating profit now seen at 215 billion yen from at 211 billion yen forecast in June, and net profit seen at 109 billion yen instead of the earlier forecast of 106 billion yen.
That compares with consensus projections of 226.9 billion yen and 115 billion yen from a survey of 11 brokerages by Reuters Estimates.
Bridgestone estimates a 1 yen rise in the dollar adds 1.6 billion yen to its operating profit, and about half that against the euro.
Bridgestone shares ended up 2.5% at 2,690 yen before the announcement.