Moody's reviews Bridgestone: upgrade possible

Tokyo -- Moody's Investors Service has placed the A3 long-term debt ratings of Bridgestone Corp. and Bridgestone Finance Europe BV, its supported subsidiary review for possible upgrade.

Moody's said the rating review reflects Moody's expectation that the company is likely to continue to maintain its financial flexibility over the intermediate term, despite an increase in capital expenditures targeting growing overseas markets, and that it has the potential to enhance its revenue and profit opportunities, supported by its solid position in the global tyre industry.

The debt rating serivice continued, "Bridgestone holds dominant market positions -- over 40 percent in Japan and other strong shares globally -- with an estimated 19 percent tyre share worldwide. It has historically enjoyed high profitability in Japan, with about 12 percent operating profit margin -- a major factor supporting its strong operating performance. However, the Japanese market is mature, and no significant growth is expected.

"Therefore, in its 3-year mid-term business plan ending December 2008, Bridgestone is focusing more on expansion in growing overseas markets in North America, Europe and Asia. For future growth, Bridgestone needs to increase its levels of capital expenditures targeting these regions."