Bridgestone Americas Continues Positive Trends
Bridgestone Americas Holding (BSAH/Nashville), subsidiary of Bridgestone Corporation, announced its financial results for the six month period ending June 30, 2005. At BSAH, first half sales increased 13% over the previous year, to $4.89 billion. Operating income improved over the prior year to $185 million (from $159 million in the first half of 2004, a 16% increase). The improvement in operating income was due to enhanced tyre product and brand mix and increased efficiencies which helped offset unprecedented increases in raw material costs. Net income also rose in the first half of 2005 by 35%, to $138 million from $102 million in the first half of 2004. BSAH benefited from strong growth in its Latin American Operations and in BFS Diversified Products, LLC. BFS Retail & Commercial Operations, LLC also exhibited growth in the first half of 2005.
The company’s North American tyre manufacturing and wholesaling operations, Bridgestone Firestone North American Tire, LLC (BFNT), reported a slight increase in overall unit sales of passenger and light truck tyres in the first half, with robust sales in the replacement segment and a decline in original equipment shipments due to a decline in unit vehicle production. BFNT experienced overall growth in unit sales of truck and bus tyres during the period. BFNT’s off-the-road and agricultural tyre groups also experienced a strong first half.
“Despite the obstacles we faced during the first half – including increasing petroleum and other raw material, energy and medical benefit costs, as well as a global shortage of truck, bus and off-the-road tyres – each of our business units continued to show strength,” said John Vispo, BSAH vice president, finance and corporate controller. “The results (…) are the direct result of the hard work of our 50,000 teammates and our loyal distributors and retailers, including our stores and dealers, across the Americas who sell our products. With record-breaking sales in our building products business, strong results from our Latin American operations, and continuing growth in consumer acceptance of our Bridgestone, Firestone and now, Fuzion, brands, we believe BSAH is in position to weather the anticipated challenges of the second half.”
Looking to full year 2005, BSAH is forecasting net sales of $10.15 billion, a $1 billion increase over 2004, breaking through the milestone $10 billion sales mark for the first time in the company’s history. In addition, it is predicting 2005 operating profit of $390 million and net income of $280 million, increases of 47% and 52%, respectively, over the prior year. Regarding its business units, BSAH expects results in its diversified products, retail and Latin American operations to remain strong for the full year 2005. BSAH is also predicting that BFNT will achieve a positive full year profit-before-tax, a first for that company which was formed in late 2001. BSAH expects sales of replacement passenger and light truck tyres in the second half of 2005 to remain strong, with sales of replacement truck and bus tyres continuing to lag demand due to global supply constraints. On the original equipment side, the company expects that truck and bus tyre demand will remain strong, while passenger and light truck sales will show a slight decrease over the prior year.