Bridgestone Returns to Profit in First Half

TOKYO —  Japanese tire maker Bridgestone Corp. said Friday that it returned to profitability in the first half of the year as sales in the United States made a dramatic turnaround after the massive tire recall scandal that nearly destroyed its U.S. Firestone brand.

Bridgestone, the world’s largest manufacturer of tires and other rubber products, also announced plans to invest $250 million to expand global production to cope with the shift to larger tires as well as growing demand for tires in industrializing nations.

The tire maker said it would stop producing some lower-grade tires in Japan and switch to producing more of the larger and more expensive tires. Production will increase in Asia, including Thailand, Indonesia and China, as well as in Poland and South America, it said.

For the six months ended June 30, Bridgestone earned $200 million on sales of $9 billion, the company said. It lost more than $250 million in the same period a year ago.

“These types of results show that the recovery at Firestone is progressing well,” President Shigeo Watanabe told a news conference in Tokyo.

Bridgestone was badly hurt by a recall of 6.5 million tires two years ago at Nashville-based Bridgestone/Firestone after the National Highway Traffic Safety Administration began investigating tires alleged to have been involved in hundreds of deaths and injuries. Bridgestone/Firestone later expanded the recall.

The tire maker, which has had to settle hundreds of lawsuits over the recalled tires, expects better times as the company recovers from the recall costs.

It said Friday that it expects to quadruple profit for this year to $579 million, up from $141 million last year.

Bridgestone’s profit shrank last year after it took a $1.7-billion loss for tire recalls and litigation fees and for closing a plant in Illinois.

But for the first half of this year, sales in North America jumped 12% from a year ago to $4.1 billion. Sales were solid in truck and bus tires as well as in tires for passenger cars and minivans, driven by a demand for Bridgestone tires, the company said.

Bridgestone’s U.S. sales bounced back this year after a strategic decision to emphasize its Bridgestone brand in the United States. The deterioration in its 102-year-old Firestone brand also has been less than many analysts expected.

Bridgestone said Firestone was expected to report a $50-million profit in the 12 months ending in December after two years of losses, up from an earlier forecast of a $10-million profit.

Despite a lagging economy that slowed sales in Japan, Bridgestone sales here edged up 1% in the first half to $4 billion. Sales in Europe grew 8% to $977 million.

For the rest of the year, Bridgestone expects demand for tires in the United States to remain strong and sales in Japan and Europe to hold steady. But the company pointed to the weakening U.S. dollar and uncertainty in Japan’s economic recovery as possible danger signs ahead.

A strong dollar helps exporters such as Bridgestone by lifting the value of its overseas earnings.