Sumitomo Rubber cuts earnings forecast as costs mount

Kobe, Japan – Sumitomo Rubber Industries (SRI) has lowered its full-year earnings forecast despite reporting record sales and higher profits for the first nine months of 2026.

The Japanese tire maker now expects annual business profit of Yen87 billion (€460 million), down from its previous forecast of Yen96 billion, and 4% below 2025.

In its 12 Nov third-quarter results, the group cited "higher raw-material prices, increase [US] tariff-related costs and foreign exchange impacts" for the lowered forecast.

SRI also revised down full-year revenue forecast to Yen1,270 billion, from Yen1,330 billion previously.

Over the three months to end of September, SRI reported a 5% year-on-year decline in business profit to Yen19.2 billion, despite a 12% increase in revenue to Yen324.5 billion.

For the first nine months of the year, group revenue increased 9.6% year-on-year to a record Yen944.3 billion, while business profit rose 21.6% to Yen59 billion.

However, SRI said rising raw-material prices had weighed more heavily on performance during the third quarter.

Revenue in the tire business increased 10.2% year-on-year in the first nine months to Yen815,369 million, while business profit increased 15.9% to Yen47,429 million.
In the domestic OE market, volumes exceeded the prior-year level as the company secured “a high market share in new models, and Japanese automakers reported robust sales.”

Volumes were also up in the domestic replacement market, helped by “strong sales of summer tires” and Synchro Weather all-season tires.

In the overseas OE market, sales volumes fell year-on-year due to “the deteriorating market environment” surrounding Japanese car makers in China and Thailand, as well as the war on Iran.

In the overseas replacement market, sales volume in the Asia-Oceania region grew due to factors such as last-minute demand ahead of the price hikes in Indonesia, in addition to the earlier-than-usual launch of winter products in China.

Volumes in Europe “increased significantly”, supported by the launch of Dunlop brand tire sales.

In the Americas, sales volume in North America declined in the first half compared with the year before, due in part to the impact of tariffs. In the third quarter, however, volumes rebounded, said SRI.

In South America, sales volume decreased as tire imports from outside the region increased significantly.

Looking ahead, SRI said it expected raw-material costs to have an additional negative impact of Yen11.8 billion on fourth-quarter earnings compared with the prior-year period.

The group also anticipates a Yen3 billion negative impact from North American antidumping duties during the final quarter.

For the full year, the company now estimates antidumping duties will reduce business profit by Yen16.8 billion.

SRI said global tire unit sales were now expected to increase 1% year-on-year, one percentage point below its August forecast.

European replacement tire volumes are expected to fall short of earlier expectations, mainly due to lower sales of Dunlop off-take products.

However, the group expects stronger sales of its own Dunlop products in North America, supported by an expanded product range.