(Adds details, president, analyst comments)
By Chang-Ran Kim, Asia auto correspondent
TOKYO, Sept 24 (Reuters) - Top Japanese tyre maker Bridgestone Corp said on Wednesday damage from a recent fire at one of its plants in Japan would shave 2.5 percent off its net profit this year and continue to hurt earnings next year.
The news comes less than two months after the company raised its annual profit forecasts for the second time in as many months, citing brisk tyre sales overseas.
The fire at the Tochigi plant, north of Tokyo, broke out on September 8 and burned for two days, destroying 165,000 tyres and the factory's rubber-mixing area.
Police are still investigating the cause.
Bridgestone, which vies with Goodyear Tire & Rubber Co of the United States and France's Michelin for supremacy in the global tyre market, estimated total damage from the blaze -- including the loss of equipment, cost of rebuilding and lost sales -- at 40 billion yen ($356 million).
While its group net profit forecast was lowered by two billion yen to 78 billion yen for the year to December 31, the sales outlook was unchanged thanks to stronger-than-expected exports and a weaker yen during July and August.
"Damage of this extent won't do too much harm. I think investors will soon come back to the stock," said Makoto Suzuki, fund manager at Chuo Mitsui Asset Management.
The new net profit forecast still represents a 72 percent rise from last year.
"But given the unfavourable circumstances where auto shares have been taking a beating due to a higher yen, Bridgestone won't be an exception," Suzuki added.
Bridgestone's shares have skidded seven percent from pre-fire levels, while those of Yokohama Rubber and Sumitomo Rubber Industries have both gained on expectations of higher demand to make up for their rival's lost production.
On Wednesday, Bridgestone shares closed up 0.84 percent at 1,561 yen before the announcement, while the main Nikkei average gained 0.26 percent.
STRONG YEN A WORRY
The dollar has lost about seven percent since Bridgestone closed books for the first half of its business year on June 30.
"The dollar is too weak now but for the moment we don't see a big impact on our earnings," President Shigeo Watanabe told a news conference.
Bridgestone's forecasts have assumed the dollar's exchange rate will average 115 yen this year.
On Wednesday, the dollar was trading at around 112 yen.
Strong overseas demand has kept Bridgestone's 40-plus factories worldwide operating at full capacity, prompting it to announce expansion plans at three plants in Japan -- including the Tochigi site -- and one in Thailand.
The company said the fire may force it to look for a different site for the expansion planned at Tochigi.
Bridgestone said the Tochigi plant, which accounts for 13 percent of its Japanese output, was operating at a fifth of capacity since some production resumed last Saturday, and would recover to around 60 to 70 percent by the end of the year.
Reconstruction of the damaged facility will be completed next September, it said.
Bridgestone's customers, including Toyota Motor , Honda Motor and truck makers Hino Motors and Isuzu Motors , have said the fire had little impact on production, but they were forced to procure tyres from some of Bridgestone's eight other plants in Japan as well as from rival tyre makers after inventory ran out.
The Tochigi plant had been producing 6,700 tonnes of tyres a month for cars, trucks and buses. ($1=112.31 yen) (Additional reporting by David McMahon and Risa Maeda)