By Oliver Hall
Bridgestone tyres has raised its profit forecasts for 2009 due to effective cost-cutting measures.
The Japanese tyres manufacturer revealed that the revisions to previous estimates which were announced on 5 November primarily reflect the impact of significant expense reduction initiatives.
Bridgestone’s estimate of 2009 net revenue of ¥2,590bn (US$28.78bn) remains unchanged from the 5 November forecast but operating profit is now estimated at ¥75bn (margin of 2.9%), up from the previous forecast of ¥60bn (2.3%).
The ordinary income estimate has been raised to ¥54bn from ¥29bn, while the company is now forecasting positive net income of ¥1bn, versus the loss of ¥10bn previously indicated.
The operating income forecast increase is due mainly to the company’s recent cost-saving efforts, as is the boost to the ordinary income forecast, although the latter also reflects the reclassification of certain expenses, from non-operating loss as originally classified to extraordinary loss.
Despite this increase to the extraordinary loss amount, the net income performance is still expected to be significantly better than previously predicted.
Despite these upward revisions to the 2009 results, the figures still remain significantly below the performance in 2008 when the company reported revenue of ¥3,234.4bn, operating profit of ¥131.6bn (4.1%) and ordinary and net earnings of ¥74.5bn and ¥10.4bn, respectively.
Bridgestone will publish details of its actual financial performance on 19 February 2009.