By Denna Bowman
Bridgestone tyres has cut its full-year income forecast as vehicle sales decline.
The Japanese tyres firm lowered its earnings forecast from a profit of 3 billion yen ($31 million) to breakeven, in a statement to the Tokyo Stock Exchange.
The world’s largest tyres manufacturer says it expects to sell fewer tyres in Japan, America and Europe this year as the global recession saps demand for new vehicles.
Bridgestone had warned in May that it would revise profit forecasts due to worsening demand.
However, the Tokyo-based company narrowed its loss forecast for the first half of the year helped by cost reductions and lower prices for raw materials.
The tyre maker now predicts a first-half loss of 46 billion yen, compared with an earlier forecast of 62 billion yen, it said.
In a statement Bridgestone announcing financial projections for 2009, Bridgestone said: “The Company believes that the global recession will continue to negatively affect the Bridgestone Group’s sales and, as a result, its production volumes.”
It went on: “The Company now forecasts that sales in fiscal 2009 will be 19% less than the previous year, mainly due to the decrease in unit sales, as well as the effect of a stronger Japanese yen.”
Commenting on the reasons for revising the projections for the first half of 2009, Bridgestone stated: “Due mainly to significant expense reduction initiatives and the effect of raw material costs, the Company anticipates that operating income, ordinary income and net income will exceed the previously announced forecast.”