--Bridgestone sees net profit rising 37% in 2013 to all-time
high
--Company aims to beat 2005 record level
--Weaker yen will help profits despite worries about European
outlook
--Current chairman to become adviser due to health problems
TOKYO--Bridgestone Corp. (5108.TO) said Monday it is looking to
break an eight-year-old profit record this year, as a weaker yen
helps boost the bottom line of the world's largest tire maker
despite concerns over the faltering economy in Europe.
Company executives acknowledged that the depreciation of the yen
will also increase the cost of imported raw materials needed to
make its products, but they said the impact will be outweighed by
improved profitability of exports from Japan of high-margin large
tires such as those used by mining vehicles.
The upswing in Bridgestone's forecast provides a stark contrast
with downbeat outlooks by its two main global peers--Compagnie
Generale des Etablissements Michelin (ML.FR) of France and Goodyear
Tire & Rubber Co. (GT), both of which cited sluggish auto
demand in Europe to explain their gloomier profit views.
Bridgestone, the world's largest tire manufacturer by volume,
said it expects net profit to rise 37% to a record 235 billion yen
($2.5 billion) in 2013, far eclipsing its previous all-time high of
Y180.7 billion in 2005.
Michelin warned its overall volume and earnings probably won't
grow this year and Goodyear, which will take additional steps to
cut costs in Europe on top of a previously announced factory
closure in France, lowered its operating income forecast to between
$1.4 billion and $1.5 billion compared with the previous $1.6
billion.
While the Japanese tire maker foresees a record-breaking
performance this year, it nevertheless shares a cautious view on
the region's outlook.
"I think Europe's situation remains unstable because its woes
could continue," Masaaki Tsuya, Bridgestone's chief executive, said
at a press conference.
Still, the depreciation of the yen will help lift the company's
operating profit by Y75 billion this year, generating about 80% of
the expected increase of Y96 billion in the company's profit, the
company said.
The upbeat projection is based on currency projections this year
for the dollar and the euro at Y89 and Y119, respectively, much
more favorable rates than the Y80 and Y103 seen last year. A weaker
yen lifts profits earned overseas when repatriated and raises the
price competitiveness of tires shipped from Japan to global
markets.
For Bridgestone, sales in Europe are also much smaller than
those in the Americas and back in Japan, accounting for just
10%-15% of the total.
In the latest quarter ended December, the company posted a net
profit of Y55.7 billion, more than double the Y21.0 billion in the
same quarter a year earlier, helped by lower raw material
costs.
Sales in the three months ended December rose 3.0% to Y813.4
billion from Y789.9 billion a year earlier.
The Japanese tire maker said separately that Chairman Shoshi
Arakawa will become an adviser due to health problems. Mr. Tsuya
will double as CEO and chairman, effective March 26.
Bridgestone reports its earnings under Japanese accounting
standards.
Write to Yoshio Takahashi at yoshio.takahashi@dowjones.com
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