Bridgestone Corp. on Thursday slashed its consolidated earnings forecasts for the business year to Dec. 31, after a scandal over faulty tires in the United States and elsewhere gouged the group's net profits by more than 80 percent from the initial projection.

Bridgestone said its consolidated net profits for the current year are expected to come to 13 billion yen, down 80.6 percent from the estimated 67 billion yen released in late August and about 85 percent lower than in 1999.

In August, Bridgestone's U.S. subsidiary, Bridgestone/Firestone Inc., announced a recall of 6.5 million ATX and Wilderness ATX tires over more than 100 traffic deaths allegedly caused by the tread peeling off the tires.

Tire recall-related losses are estimated at $900 million. After covering part of the estimated losses with insurance, Bridgestone said it plans to set aside $750 million for extraordinary losses when the company closes its books for the current business year.

Under the impact of the tire recall scandal on sales at the U.S. subsidiary, Bridgestone's consolidated sales are projected to drop 4 percent from a year before to 2 trillion yen, which is 2.4 percent lower than the August estimate.

Bridgestone is projecting 125 billion yen in consolidated pretax profits, down about 37 percent from the previous year and down 24.2 percent from the earlier forecast, due partly to the decline in the operating rate and the rise in materials prices, the company said.

Despite the reduced earnings projections, Bridgestone President Yoichiro Kaizaki said the company will come through with its promise of an 8 yen per-share dividend for the second half of the current year.

The recall scandal is expected to force Bridgestone/Firestone to suffer its first net loss in eight years -- roughly $500 million (about 60 billion yen).

Bridgestone/Firestone is projected to post a net loss of $200 million (about 24 billion yen) in 2001, a second yearly net loss, but Kaizaki said the Japanese parent company is forecasting that the U.S. subsidiary will return to profitability by the latter half of 2002.