Bridgestone ups earnings outlook on yen, cost cuts

TOKYO, June 25 (Reuters) - Bridgestone Corp (5108.T), Japan's largest tyre maker, lifted its operating profit forecast for 2009 by 24 percent on Thursday, saying the yen is less strong than it expected.

The upgraded outlook also reflects improved prospects for demand in Japan and Europe in the second half of the year, deeper-than-targeted cost cuts and falls in materials prices, a Bridgestone spokesman said.

The company raised its full-year assumed rates for the dollar to 95 yen from 85 yen and for the euro to 128 yen from 115 yen.

It had cancelled its 2009 guidance on May 8, when it more than tripled its operating loss forecast for the first half of the year, blaming a slump in global demand. That sent its shares diving 7 percent on the next business day, May 11.

Bridgestone, which competes with France's Michelin (MICP.PA), now forecasts an operating profit of 56 billion yen ($582.3 million) for this year, up from its original projection made on Feb. 19 for 45 billion yen, it said in a statement.

The forecast still falls below the average projection of 64 billion yen by 13 analysts in a Thomson Reuters Estimates poll, most of whom have remained neutral or bullish on Bridgestone even after it downgraded its half-year outlook on May 8.

Bridgestone also revised up its half-year earnings projections.

But it slashed its net earnings projection for the full year to break even instead of a profit of 3 billion yen.

The spokesman said the downward revision in net earnings was due to the company's new accounting rule to reflect tax payments on unrealised sales immediately instead of compensating for such payments on paper until the sales are realised.

Bridgestone shares closed down 2.4 percent at 1,401 yen ahead of the announcement.

Michelin said last week it sees no recovery in the global tyre market before the middle to end of 2010. [ID:nWEA7220] ($1=96.16 Yen) (Reporting by Yumiko Nishitani; Editing by Michael Watson)