BRIDGESTONE Corp, the world's largest tire maker by sales, fell the most in two weeks after the Nikkei newspaper said operating profit may drop seven percent this year because of higher rubber prices and a stronger yen.
Bridgestone fell 5.1 percent to close at 1,561 yen (US$14.57) on the Tokyo Stock Exchange. Sumitomo Rubber Industries Ltd, Japan's second-largest tire maker, fell 8.4 percent, the most in 18 months, to 804 yen. Yokohama Rubber Co, the third-largest, lost 6.3 percent to 509 yen.
Tokyo-based Bridgestone may post an operating profit of 205 billion yen for the year ending December 31, Nikkei said, without saying where it obtained the information. Rubber prices in Tokyo have risen about 20 percent since August 2007.
"Rubber prices haven't risen as much as energy and grain prices, but tire makers' price hikes may not be able to fully absorb the rising cost of the material," Shuji Sugata, research manager at Mitsubishi Corp Futures & Securities Ltd in Tokyo, told Bloomberg News.
Bridgestone is scheduled to release 2007 earnings on February 19. The company has forecast an operating profit of 215 billion yen for the year ended December 31.
Sales in 2008 may rise six percent to about 3.6 trillion yen because the company is selling more tires in China and southeast Asia, the newspaper said.