Bridgestone cuts earnings forecast on plant closing costs

Tonkyo - Bridgestone Corp. has downgraded its first-half 2006 earnings forecast about 9 percent because of expected costs associated with the pending closure of its Oklahoma City tyre plant and a weakening yen.

Bridgestone said it expects costs associated with closing the Oklahoma City plant to result in a loss of $170 million this year (€,135 million), of which $140 million will be booked during the first half. This loss will reduce net income in the first half by about $26.5 million.

Sales, on the other hand, are expected to grow this year more than previously forecast thanks to "robust" demand globally, the firm said. First-half sales are expected to hit $12 600 million, 13.8 percent ahead of the 2005 performance and nearly 3 percent better than previously forecast.

Operating profit is expected to come in at $680 million, 10 percent better than forecast but 16.3 percent lower than the first half 2005 performance.

Bridgestone made the forecast adjustments in its first quarter earnings release.

Bridgestone/Firestone announced April 28 it may close the Oklahoma City plant by Dec. 31, but the tyre maker and the union have said they are open to talks on the matter.

Global market forces have made it "extremely difficult, if not impossible," to make the plant competitive once again, even with "significant" capital investments, the Nashville-based tyre maker said in a statement.

From Rubber & Plastics News (A Crain publication)