Bridgestone loss at $250M in 1H

Bridgestone President Shigeo Watanabe's company is now taking the hit for its costly recall of 6.5 million tires

By staff and wire reports

TOKYO, Japan -- Tire giant Bridgestone Corp. said Friday the cost of its massive tire recall pushed it into the red for the first half of the year.

Tokyo-based Bridgestone posted a net loss of $250 million (30.6 billion yen) through June. For the same period last year, it made a net profit of 18.9 billion yen.

This half-year's results included an extraordinary charge of $355 million (43.3 billion yen) for the recall.

Sales rose 3.7 percent to 1.0 trillion yen thanks to a weakening yen.

The losses matched the company's lowered forecast made in June.

Profit for year still predicted

Bridgestone said Friday it still forecasts it will break into the black this year, with a 10 billion yen profit. It foresees full-year sales of 2.1 trillion yen.

Analysts said they weren't surprised by the loss. But they warned that the spillover could continue to hurt for the rest of the year.

Bridgestone's U.S. subsidiary, Bridgestone/Firestone, took a $570 million charge in June. Starting last August, it recalled 6.5 million tires.

The tires have been linked to more than 200 deaths in the United States and at least 700 injuries.

The first court case against Firestone is slated to start in McAllen, Texas, next week.

Bridgestone keeping Firestone alive

The company is fighting a second recall, which analysts say it could not afford. American regulators are considering a forced recall.

Firestone was in fact forced to sell out to Bridgestone in 1990 after the U.S. company contested a 1978 recall.

The combination of Firestone tires and Ford Explorer vehicles has been blamed for a higher blowout rate when the tires were driven at high temperatures.

Bridgestone said Friday that overhauling its U.S. operations cost it 25.4 billion yen in special losses.

Nashville, Tennessee-based Bridgestone/Firestone and Ford have fallen out, as they fault each other. They ended one of corporate America's longest relationships, spanning more than 100 years, in May.

It said that would cost it 2 percent of worldwide sales. Bridgestone says the fallout hasn't affected other relationships or its business elsewhere in the world.

Analysts wonder if the Firestone brand can survive. But Bridgestone maintains it will keep the name alive. It sells tires under the Bridgestone name in Asia.

Firestone said Thursday it would buy its customer Morgan Tire. That will contribute $500 million in sales, Bridgestone said Friday, that have already been factored in.

Bridgestone stock closed level with Thursday's close at 1,000 yen in Tokyo, where the earnings came after the end of trading.

Reuters contributed to this report.