Bridgestone Corp. reported a 19% drop in operating profit for fiscal 2019, to $3 billion, on 3.4% lower sales of $32.4 billion.
Bridgestone attributed the earnings decline to a number of factors, including lower volumes, increased depreciation, accounting reclassification and foreign currency exchange losses.
Net income was up slightly (0.3%) to $2.69 billion. For fiscal 2020, Bridgestone is forecasting a rebound in earnings of 5% or better, based on a rebound in manufacturing activity (higher volumes), a better price/mix component and reduced raw materials expenses. The double-digit earnings decline lowered the operating margin nearly two full points to 9.2%.
Net sales in the tire segment fell 3.2% to $27.2 billion, while operating profit dropped 17.3% to $3 billion.
Overall, unit sales fell roughly 4% worldwide for both the consumer and commercial sectors, Bridgestone said.
In North America, replacement and OE consumer tire unit sales were off 2% and 10%, respectively, while replacement truck/bus tire sales fell 9%. OE truck/bus tire sales were unchanged versus 2018.
On a consolidated basis (tire and non-tire business units combined), Bridgestone's revenue in the Americas fell 3.1% last year to $15.7 billion. Operating income for the region was off 13.2% to $1.42 billion, reducing the operating margin a point to 9.1%.
Bridgestone is forecasting unit sales growth of roughly 5% this year for both consumer and commercial tires on a global basis. That holds for the North American replacement markets for both categories, Bridgestone's figures show. On the OE side, sales should fall 6% to 10% to consumer vehicle producers and 16% to 20% to commercial vehicle makers.
