Toyo raises financial outlook for 2020

Toyo Tire reported a double-digit increase in operating profit in the third quarter of 2020, amid a 2.9% decline in sales. On this basis, the company's management decided to slightly revise its profit forecasts for the entire financial year upwards.

In the third quarter, Toyo's operating income rose 26.9% to $133 million and sales reached $907 million. Net profit for the period increased 15 times, to $52.5 million.

The Japanese company's tire business reported a 19 percent increase in operating profit to $134.7 million. At the same time, sales decreased by 2.2% to $813 million.

In North America, Toyo improved its quarterly results by 5.4% to $531 million, while operating profit in the region increased 62.1% to $49 million. Sales in pieces were up 4% quarter-on-year, but still lagged behind the same period year-to-date.

In the first three quarters, Toyo's corporate operating profit fell 16.7% to $205 million, on the back of an 11% decline in sales to $2.3 billion. Net income fell 29.8% to $ 92.9 million. Operating profit for Toyo's tire business declined 14.5% from January to September to $223.5 million, while sales fell 9.5% to $2.05 billion.

Business in North America fell 5.8% to $1.28 billion.

Toyo's results also showed a significant impact on production from the Covid-19 pandemic. For example, in North America, production changed from 18,300 tons in the first quarter of the year to 8,000 tons in the second quarter and then back to 18,300 tons in the third quarter.

With sales recovering to near 2019 levels, Toyo's management improved the company's fiscal 2020 outlook, raising its earnings and sales expectations by 10% and 3%, respectively, from the annual average. The revised earnings forecast, however, is still below last year's by nearly 12%, and the forecast for sales is below the 2019 level by about 10%.