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Bridgestone full-year profit down 53 pct

From businessweek| February 25,2007

Japanese tire maker Bridgestone Corp. said Tuesday that full-year profit dropped by more than half last year due to higher prices for rubber, crude oil and other raw materials.

Net income totaled 85.1 billion yen ($709.17 million) in the 12 months ended Dec. 31, compared with 180.7 billion yen in profit a year earlier, the company said in a statement.

Sales at the world's second-biggest tire maker by volume after France's Michelin SA rose to 2.991 trillion yen ($24.9 billion).

Bridgestone said its operating income dropped 11 percent to 190.8 million ($1.59 billion) due partly to the high prices for natural rubber, crude oil and other raw materials, despite a weaker yen that boosted sales abroad.

The company said during the period it posted an extraordinary loss of 21.7 billion yen ($180.83 million) in connection with the closures of two money-losing tire plants -- one in Oklahoma City in the U.S. and the other in Chile.

Bridgestone still operates seven tire-making plaints in the United States, including one in Des Moines, Iowa, and in La Vergne, Tennessee, according to company spokeswoman Chiharu Kikuchi.

The Tokyo-based tire maker did not break down results by quarter.

The drop in annual profit also resulted from a one-time gain of 78.5 billion yen in 2005 when the company returned part of a pension plan to the government.

Last year, Bridgestone boosted production capacity in strategic product lines, while aiming to expand sales of high-value-added products.

Looking ahead, Bridgestone said the world's economy will continue to show steady growth in 2007, helping the company's overall earnings grow. In the U.S. market, it predicts sales of passenger car and light truck tires to rise while forecasting a rise in passenger car, light truck, truck and bus tires in Europe over last year.

In Japan, the company expects unit sales of tires will remain on par with the previous year.

For the current year through Dec. 31, Bridgestone forecast a group net profit of 90 billion yen ($750 million) on sales of 3.08 trillion yen ($25.67 billion).

Bridgestone's results have only in recent years turned around from losses related to a massive tire-recall scandal at its U.S. subsidiary, Bridgestone Firestone North American Tire, seven years ago.

Bridgestone shares closed 0.58 percent down at 2,565 yen ($21.38) on the Tokyo Stock Exchange shortly before the earnings were announced.

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