Yokohama Rubber Co. Ltd. posted net income of 6.5 billion yen on net sales of 139.9 billion yen for its first quarter ended March 31, 2014. That compares to income of 5.6 billon yen on sales of more than 127.6 billion yen for 1Q 2013.
Based on the exchange rate on March 31, 2014, Yokohama recorded net income of $63 million on net sales of more than $1.3 billion for the first quarter. The company's income-to-sales ratio was 4.6%.
Operating income increased 54.6%, from nearly 7.6 billion yen to 11.7 billion yen, a record for the company. Yokohama cited three factors for the increase:
1. a downward trend in raw material prices;
2. the weakening of the yen, and
3. sales growth.
Sales and earnings increased in each of Yokohama's three business sectors: tires, industrial products and "other products." The strong performance in tires "reflected robust growth in Japan and sales growth overseas, too," said Yokohama.
In Yokohama's tire operations, operating income increased 62.9%, to 9.3 billion yen, on a 9.4% increase in sales, to 109.5 billion yen (nearly $1.1 billion). Business expanded overall in overseas markets as tire sales recoveries in North America and in China more than offset weakness in Russia and in some other markets.
In Japan, the company's sales of original equipment tires were strong. That increase reflected an upturn in vehicle demand in advance of the April 1 hike in the nation's national sales tax. Yokohama also posted strong sales growth in replacement tires in Japan, a reflection of sales gains in studless tires, bolstered by heavy snowfalls, and in summer tires, stimulated by the impending hike in the national sales tax.
Yokohama projects its first-half results will compare to 1H 2013 as follows: net income will increase 4%, to 13.5 billion yen; net sales will increase 10.5%, to 298 billion yen; and operating income will increase 31.2%, to 25 billion yen.
Yokohama projects its full-year results will compare to fiscal 2013 as follows: net income will increase 7.1%, to 37.5 billion yen; net sales will increase 7.5%, to 647 billion yen; and operating income will increase 11.2%, to 63 billion yen.
