AKRON (May 4) — Goodyear continued its earnings improvements in the first quarter with net income of $74 million and record sales of $4.86 billion — increases of 8.8 and 1.9 percent, respectively.
The tire maker´s largest and erstwhile struggling unit, North American Tire, also made sales and profits gains. Sales rose 4.7 percent to $2.24 billion while segment operating income jumped nearly four-fold to $43 million.
Goodyear said its companywide sales grew on higher pricing and a favorable product mix, mostly in North American Tire.
"Sales increases were driven by strong revenue-per-tire growth of 7 percent as we focus our efforts on the high performance, profitable segments of the tire market," said Chairman and CEO Robert Keegan.
However, tire unit volume fell 6.7 percent in North American Tire in the quarter to 23.7 million units from 25.4 million units in 2005. Goodyear said the softer volume was primarily in the private label replacement market.
Total segment operating income grew 6.5 percent to $311 million from $292 million in 2005. All six of Goodyear´s units were in the black, though European Union and Eastern Europe, Middle East, Africa Tire posted lower profits than the prior-year period — down 32.7 and 8.5 percent, respectively.
Engineered Products´ sales fell 1.7 percent to $395 million primarily because of expected volume reductions in the unit´s military channel, which offset higher sales in the industrial and replacement markets, Goodyear said. Segment operating income jumped 38 percent to $29 million principally because of product mix improvements, the company said.