Tokyo – Bridgestone Corp. has seen its operating income decline 3% to Yen290.8 billion (€2.25 billion) in the first nine months of 2018, compared to the same period the year before.
The Japanese tire and rubber company reported a 0.4% increase in net sales for the period at Yen2.67 trillion in its third quarter results published 8 Nov.
Sales in the tire division rose 1% compared to 2017 to Yen2.22 trillion, while diversified products’ sales remained flat at Yen466 billion.
Operating income for the tires business increased 2% to Yen280 billion, in stark contrast with a 57% decline in operating income from the diversified products segment.
Bridgestone attributed the overall decline in operating income to a 17% rise in SGA (selling, general and administrative) expenses, and a 4.8% drop in price mix and volumes. These factors offset an 18% improvement in raw materials costs.
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.
The company statement did not further elaborate on the restructuring programme but said it was currently focusing on a reorganisation to strengthen the ‘solution business’.
In the tires business, revenue was up due to “promotion activities”, continued Bridgestone, noting growth in sales of large-rim size tires and large OTR ones.
Additionally, the company is raising prices in Americas and Europe “to keep appropriate price positioning”.
For the full year, Bridgestone expects sales to remain flat at Yen3.65 trillion, with revenue remaining on par with prior-year levels in both the tire and diversified products divisions.
Operating income is projected to fall 2% to Yen410 million, Bridgestone said.