TYO:5108

Bridgestone Posts Higher Q1 Earnings Despite Middle East Conflict's Impact on Sales

Bridgestone's (TYO:5108) earnings in the first quarter climbed despite its tire sales being affected by the ongoing conflict in the Middle East.The profit attributable to owners, which includes discontinued operations, jumped 21% to 91.1 billion Japanese yen from 75.9 billion yen a year earlier, with earnings per share rising year on year to 72.31 yen from 55.53 yen.Revenue climbed 5.2% to 1.113 trillion yen from 1.058 trillion yen. Both the tire business and diversified products business helped boost the company's total revenue after posting respective a 4% and 3% rise in revenue.In its earnings presentation, the tire maker said sales coming from the Middle East account for only approximately 1.5% of its total sales, but the global demand for tires declined as the war in Iran caused disruption in the supply chain.Among Bridgestone's product lines, the sales of premium tires continued to expand during the quarter ending March 31. Meanwhile, the sales for off-the-road, or OR, tires declined due to lower coal demand in Asia, while maintaining high profitability. Sales in both replacement tires, or REP, and original equipment, or OE, tires fell, but that did not hinder the growth of profit and margins.In Japan, the company's revenue and profit increased due to the depreciation of the local currency and expansion in the sales of replacement tires and improved prices.Cost inflation -- brought by rising material costs and logistics costs due to the global oil and energy price hikes -- is expected to continue to have an indirect impact on the company.Bridgestone predicted that the estimated impact of cost inflation for the entire year will be approximately 70 billion yen.Moreover, the company forecasted that its 2026 attributable profit will increase 3.9% year on year to 340 billion yen. Earnings per share will be at 270.87 yen and revenue will inch 1.6% higher to 4.500 trillion yen from a year earlier.