Toyo Tire & Rubber Co. Ltd. reported record sales and earnings for the nine months ended Sept. 30, as profits benefited from the effects of higher revenues, lower raw materials costs and favorable foreign-exchange rates.
Operating income for that period jumped 37.8 percent to $327 million on 7.1-percent higher sales of $2.76 billion, resulting in an operating ratio of 11.8 percent. Net income nearly quadrupled to $226.1 million, according to the tyre maker.
Operating income for the third quarter was up 15 percent to $120.3 million on 5.1-percent higher sales of $961.1 million, Toyo said, while net income hit $75.8 million, a turnaround from a net loss in the 2013 period.
Toyo’s results reflected a strong performance in the tyre business unit, which reported a 44.8-percent jump in nine-month operating income to $305.2 million and an 8.6-percent increase in sales to $2.18 billion.
Toyo attributed the improvements to unit sales gains in its domestic replacement business and in its key overseas businesses, including North America, where unit sales and revenue increased due to “strong” sales of higher value-added SUV tyres.
Domestic OE sales dropped slightly as Japanese vehicle makers shifted production to models where Toyo does not have an OE presence.
The company’s operating income in North America increased 26.2 percent for the nine months to $78.8 million on 14-percent higher sales of $1.14 billion, for an operating ratio of 6.9 percent.
Toyo said its business outlook for fiscal 2014 remains unchanged: 8-percent sales gain to about $3.85 billion and a 22-percent jump in operating income to about $438 million, or an operating ratio of 11.4 percent. Net income should more than double to nearly $270 million, according to the company.