TOKYO (Reuters) -- Top Japanese tire maker Bridgestone Corp. reported a 31 percent jump in half-year net profit on Friday, with strong sales in almost every corner of the world helping it leave behind a recall scandal that nearly sank its U.S. Firestone brand.
The tire maker also raised its full-year forecasts for the second time in two months as exports continued to climb and the euro remained robust.
The firm results come two weeks after a Texas court gave preliminary approval for a national class-action settlement involving the Firestone unit and its recall of 6.5 million tires three years ago.
Analysts expect Bridgestone to continue expanding profits as it boosts its global market share and improves its product mix, in contrast to rivals Michelin and Goodyear Tire & Rubber Co., whose sales fell during the same period.
But they warned that any significant rise in the yen or natural rubber prices could weigh on its bottom line, while weak replacement demand in Japan remained a worry.
"There are many risk factors such as the uncertain global and Japanese economies, as well as rising rubber prices. But we believe our U.S., European and Asian divisions will independently continue their strong growth," Executive Vice President Hiroshi Kanai told a news conference.
"In Asia, we will try to bring forward our plans to boost production capacity, especially in China where motorization is occurring at break-neck speed," he added.
Attesting to the rapid growth in the region, Bridgestone also announced plans to expand production capacity for truck and bus tires at three plants in Japan and one in Thailand, saying its factories were currently running at full capacity worldwide.
Group net profit for the six months to June 30 was 31.96 billion yen ($268.4 million), compared with 24.48 billion yen booked in the first half of last year. Sales rose 1.7 percent to 1.11 trillion yen.
Operating profit fell 2.5 percent to 71.31 billion yen as a rise in the price of natural rubber shaved 26 billion yen and pension-related costs slashed 15 billion yen from profits.
The results came as little surprise because the company had raised its conservative half-year net profit forecast in late June to 29 billion yen, citing strong exports to Asia and the Middle East and brisk sales in the United States and Europe.
"Today's results merely confirm Bridgestone's near-term strength, which has already been factored into its share price. The announcement doesn't contain much that would prompt investors to take action," said Hajime Yagi, general manager at Meiji Dresdner Asset Management.
SECOND HALF SEEN SOFTER
Although profits are expected to rise for the full year to Dec. 31, analysts and the company said the second half looked less rosy, since part of the rise in export shipments in the first half was due to the build-up of inventory as Bridgestone prepared for labor talks in the United States.
"Our exports to the U.S. were especially strong in the second half last year, so growth will be slight this year," Kanai said.
He added that the current price of natural rubber -- at around $1 per kg -- was not high, and that prices were more likely to rise than fall.
Still, Bridgestone raised its full-year earnings forecasts, putting group net profit at 80 billion yen, which would represent a 76 percent rise from the previous year.
Bridgestone will spend a total nine billion yen for the capacity increase in Japan and Thailand, which is part of the 90 billion yen earmarked for a global expansion plan.