Yokohama Rubber reports 34% profit growth despite North America challenges

Investing.com -- Yokohama Rubber reported a 34% year-on-year increase in third-quarter business profit to ¥38.6 billion, meeting analyst expectations as strong sales in Japan, China, and Europe offset weakness in North America.

The tire manufacturer’s North American performance was hampered by inventory adjustments from certain customers experiencing credit issues. Additional pressure came from tariff effects, which caused some demand to shift toward lower-priced products. The company plans to recover in the fourth quarter by expanding its sales channels in the region.

In Japan, Yokohama Rubber benefited from customers frontloading purchases ahead of winter tire price increases. While this might lead to reduced fourth-quarter demand, the company expects overall sales in Japan to remain strong.

The company maintained its full-year business profit guidance at ¥153 billion, anticipating that improvements in its recently acquired mining tire business will counterbalance secondary tariff effects in India.

Morgan Stanley noted that Yokohama Rubber’s assumptions regarding exchange rates and price increases appear conservative.

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