Yokohama earnings, sales jump in first quarter
Yokohama Rubber Co. Ltd. generated markedly higher earnings and sales in the quarter ended March 31, buoyed by strong overseas tire, hose and sealing products sales gains and the first-time inclusion of results from Alliance Tire Group.
Operating earnings jumped 32 percent to $79.8 million on 14.2-percent higher sales of $1.3 billion, yielding an operating ratio of 6.1 percent, up a point from a year ago.
Yokohama did not comment specifically on the reasons for the earnings improvement.
In the company's tire segment, operating income increased 28.4 percent to $60.7 million on a 4.3-percent rise in sales to $925.2 million, thus raising the operating ratio to 6.6 percent.
Business expanded strongly in the OE sector, led by growth in China, YRC said, while replacement sector growth was led by gains in North America and Europe.
Operating profitability increased in Japan, however, driven by improvement in the company's sales portfolio.
Rather than integrate Alliance Tire into its tire segment, YRC has created a separate ATG operating segment.
For the quarter, ATG generated $5.6 million in operating income on sales of $131 million, which YRC said "accorded with management's expectations in unit volume and in value."
Global weakness in grain prices weighed on demand for agricultural machinery and thus undercut ATG business in the OE sector, YRC said, but sales increased in replacement tires.
No comparative figures for 2016 were published.
YRC said management abides by its earlier projections for the fiscal first half and fiscal year, which call for an 11-percent drop in operating income for the six months ending June 30 but a 12-perecnt increase for the full year.