Tokyo --Yokohama Rubber Co. Ltd. suffered a 14.7-percent drop in operating income in the first quarter despite 5.7-percent higher sales. The company cited higher raw materials costs and administrative expenses for the earnings drop.
Net income, on the other hand, rose 51.8 percent due to a combination of one-time factors and lower pension and severance costs. As a result, Yokohama revised upward its half- and full-year net earnings forecast.
For the three months ended June 30, Yokohama reported operating profits of $25.3 million on sales of $869.8 million. Net income rose to $13.6 million.
Tire Group sales grew 5.2 percent to $632 million on the strength of favorable sales overseas, particularly in North America and Europe. Segment operating income, however, declined 12.7 percent to $26.2 million, reflecting rising raw materials costs and start-up expenses related to new plants in Asia.
Sales in North America rose 10.3 percent to $155.6 million while operating income rose sevenfold to $4.1 million.