Bridgestone Forecasts Lower Profits for 2008

A 32 per cent drop in net profit for this year has been forecast by Bridgestone Corporation – the result, it says, of rising raw material prices. The anticipated fall in net profit to 90 billion yen (£426.3 million) is paired by a forecast 22 per cent decrease in operating profit to 195 billion yen (£923.7 million).

While strong sales and a weaker yen allowed for higher than expected earnings in 2007 – operating profit rose 31 per cent to 249.96 billion yen (£1.18 billion) and net profit, at 131.63 billion yen (£623.5 million), reflected a very respectable increase of 55 per cent – the growing strength of the yen and higher depreciation costs necessitate a much more sober outlook. Bridgestone’s own predictions for the year are viewed by some as moderately conservative; an average forecast from 10 brokerages, reports Reuters, puts operating profit at 231.1 billion yen (£1.09 billion) and net profit at 121.8 billion yen (£576.96 million) in 2008.

Bridgestone is working towards increasing operating profit by 80 per cent by 2012 on the back of sales of 4 trillion yen, with a profit margin of 10 per cent. In 2007 the profit margin sat at 7.4 per cent.