Bridgestone Surges After Forecasting Earnings Jump

Bridgestone Corp, the biggest tire maker worldwide is seeing their largest growth since the last four years. Analyst predicted the company will increase their yearend profit by as much as 14%. The price of rubber is declining and supply is excessive. The weakening value of yen along with the factors of declining rubber will drive down the price of rubber, lowering the cost of producing tires for Bridgestone Corp. Based on analyst predictions Bridgestone’s net income is forecasted to have a 37% increase with an increase in consumer demand. The company expects to increase their output by 9.6% to meet the growing demands of consumers and emerging markets. Since the production of tires varies inversely with the value of the yen, for every one yen decline, Bridgestone will gain an estimated 3.9 billion in profits.

The fluctuating economy of Japan is playing a big role in the profit growth of Bridgestone Corp. With the declining value of rubber and yen, operating cost for the giant tire maker is significantly reduced. It is good to see that despite the bad economy, some companies are still growing. The reports of predicted profits will appeal to many investors who are looking for growing companies to invest in.

Written by: Wilson Tang

Source:

http://www.bloomberg.com/news/2013-02-19/bridgestone-surges-after-forecasting-earnings-jump.html

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