Tokyo – Despite 9.2% higher sales last year, Bridgestone Corp. suffered a 6.8% drop in fiscal 2017 operating income as higher raw materials costs offset positive gains in other areas.
Operating income for the year fell to $3.74 billion on revenue of $32.5 billion, cutting the operating margin two points to 11.5%. Net income rose 8.6% to $2.57 billion.
Bridgestone said its fiscal year played out against a scenario where many overseas economies showed gradual recovery in the midst of continued political and economic instability. The company singled out rising demand in the mining industry along with rising commodity prices as a key factor.
In the tire segment — which represents 83% of the group's revenue — operating income fell 6.7% to $3.46 billion on 9.6-percent higher sales of $27.1 billion, dropping the operating ratio more than two points to 12.8%.
Regionally, unit sales passenger, light and medium truck/bus truck tires rose steadily in Japan, Bridgestone said. In North America, passenger and light truck tire sales fell, but unit sales of truck/bus tires increased strongly.
In Europe, sales increased steadily across the board as did unit sales of car and light truck tires in China and Asia Pacific. Sales of trucks/bus tires, however, rose "substantially" there, Bridgestone said.
Sales of radial large and ultra-large OTR tires for construction and mining vehicles increased "substantially" on a global basis.
Bridgestone is forecasting gains in both income (up 10%) and sales (up 4%) for the current fiscal year, although it cautions that fluctuating currency exchange rates and raw material/feedstock prices along with an "ongoing lack of clarity" in the global economic situation will require careful attention.