Bridgestone Q4 Profit Dives as Truck Tire Demand Slumps

Bridgestone reported revenue of $7.424 billion in the fourth quarter of 2023, down 1.5% compared with $7.539 billion in the 2022 period. (Bridgestone Corp. via X)

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Profits at Bridgestone Corp. dived in the fourth quarter of 2023 on the back of what the Japanese tire manufacturer said Feb. 16 was a remarkable slump in demand, particularly from the truck and bus sectors in North America and Europe.

The company posted net income of $429.9 million in Q4, down 57.9% compared with $742.6 million in the same period a year earlier. Bridgestone reports earnings in yen and exchange rates were current as of Feb. 16.

Bridgestone reported revenue of $7.424 billion in Q4, down 1.5% compared with $7.539 billion in the same period a year earlier.

The company’s tire production globally in the most recent quarter was 380,000 tonnes of rubber, compared with 440,000 tonnes of rubber in the year-ago period. Bridgestone does not provide actual tire sales figures.

Bridgestone’s Americas revenue totaled $3.369 billion in the final three months of 2023, down 8% compared with $3.661 billion in the 2022 period.

The company’s tire production in North America in the most recent quarter was 90,000 tonnes of rubber, compared with 100,000 tonnes in the year-ago period.

Bridgestone operates 14 manufacturing facilities in the United States, eight of which produce tires.

Overall, in 2023, the company posted a profit of $2.244 billion or $3.21 per diluted share, up 10.2% compared with $2.035 billion or $2.27 per diluted share a year earlier.

Bridgestone’s revenue in 2023 came in at $28.7 billion, up 4.96% compared with $27.344 billion a year in 2022.

The company’s profit margin from continuing operations was 7.6% in 2023, compared with 7.4% in the year-earlier period.

Tire production globally at Bridgestone in 2023 was 1.63 million tonnes of rubber, compared with 1.77 million tonnes of rubber in the year-ago period.

Production in North America in 2023 was 370,000 tonnes of rubber, compared with 380,000 tonnes of rubber in 2022.

The amount of truck and bus tires sold to retailers — or sell-in — in 2023 was about 80% of the figures for 2022, Bridgestone said.

The full-year figures were supported by positive currency exchange rates as well as passenger vehicle and mining equipment sales.

But the second half of 2023 saw a dramatic implosion in demand for replacement truck and bus tires in the U.S. and Europe, the company said, amid “a more severe business environment than expected.”

As a result, Bridgestone is undertaking a complete overhaul of its European operations.

However, the outlook is brighter, the company said, adding that it expects a normalization of activity in the first quarter of the year.

Sales to customers by retailers — also known as sell-out — is expected to recover, with distribution inventory expected to normalize, the company said. Sell-out demand recovery is set to be slow in the first six months of 2024, but advance in the second half of the year, Bridgestone added.

Sell-in demand is not expected to recover until later in the year, the company said, but overall for 2024, sell-in consumption will top 2023’s levels by just less than 10%.