Bridgestone Corp., Japan’s biggest maker of automobile tires, said Friday that its group net profit in the business year through December 2002 surged 161 percent to 45.38 billion yen.
The company said the increase was due to strong overseas sales and the fact that the previous year’s figures were depleted by recall-related losses in the United States.
The consolidated operating profit for the 2002 business year jumped 55.8 percent to 183.86 billion yen, while group sales rose 5.3 percent to 2.25 trillion yen.
The results were an improvement on a revised earnings forecast issued in early December, when the firm decided on a one-time payment of 37 billion yen to write off the book value of five antiquated plants in Europe.
The dramatic improvement in the firm’s financial fortunes was attributed to the 203.16 billion yen special loss booked in the previous year in connection with the recall of tires by its U.S. Bridgestone/Firestone unit.
Certain types of Firestone tires were allegedly linked to traffic accidents resulting from tread separation, forcing the firm to recall 6.5 million tires in August 2000.
For the 2002 business year through December, Bridgestone/Firestone Americas Holding, Inc. returned to profitability for the first time in three years, chalking up a net profit of $83 million.
“We were able to return to the black in our North American operations, which was our most urgent target when I became president (two years ago),” said Bridgestone CEO Shigeo Watanabe.
The firm, which competes for global supremacy in the tire business with Goodyear Tire and Rubber Co. of the United States and French giant Michelin, said growth for the period was driven by brisk exports to the U.S. and the rest of the world, even though growth at home was negligible.
The firm now derives nearly 70 percent of its group revenues from overseas sales.
The company officials said a weaker yen against the dollar and the euro during the period also helped push up the group’s sales and profits.
For fiscal 2003, the firm is forecasting a group net profit of 70 billion yen on revenue of 2.24 trillion yen.
The firm expects to see continued growth in overseas markets. but growth in its domestic sales to remain limited.
It pointed out, however, that the rising price of natural rubber is likely to cut about 26 billion yen off the consolidated pretax profit.
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