Sumitomo earnings up despite 13% sales drop

ERJ staff report (TB)

Kobe, Japan -- Sumitomo Rubber Industries Ltd. (SRI) reported a 12-percent rise in operating profits for the year ended Dec. 31 despite a 12.8-percent drop in sales.

The divergent results - operating income up to $307 million and sales down to $5.6 billion - boosted SRI's operating ratio more than full percentage point to 5.5 percent.

Net income was up ninefold to $97.1 million.

Sumitomo did not comment on the results, which benefited from a relatively strong fourth quarter. Operating earnings in the quarter climbed 153.4 percent while sales slipped just 0.2 percent.

SRI's tyre division reported a 42.1-percent jump in operating profits for the year to $240.5 million on 13.5-percent lower sales of $4.63 billion, boosting the operating ratio two full points to 5.2 percent.

Sales in North America - where the firm's Sumitomo- and Falken-brand tyres are sold by Treadways Corp.'s Sumitomo Division and by Falken Tire Corp., respectively - were off 12 percent to $796.3 million, the recently released figures show.

Capital expenditures for the tyre division fell 39.5 percent to $320.8 million.

From Tire Business (A Crain publication)