AKRON (July 31, 2008) — Goodyear posted record second quarter sales and improved operating income, fueled mainly to its international businesses, which helped offset a drop in North American revenues.
Goodyear's quarterly pretax operating income jumped 74 percent to $167 million on record sales of $5.24 billion, up 6.5 percent over the second quarter of 2007. Net income was up 33.9 percent to $75 million.
For the first half, Goodyear reported a net income of $222 million, compared with a $118 loss in the year-ago period, as sales edged up 8.1 percent to $10.2 billion. Operating income grew nearly sixfold to $417 million.
Goodyear said improved pricing, a richer product mix and the impact of favorable foreign currency translation helped offset lower sales volumes in North America and Europe. Goodyear's international businesses collectively increased sales 18 percent over 2007's second quarter, representing about 60 percent of the tire maker's total sales for the quarter.
Sales for the firm's North American Tire unit fell 6.4 percent to $2.13 billion for the quarter. Tire unit volume dropped 12 percent due to weak demand, according to the company, particularly in the consumer original equipment market and in low-value-added segments. Goodyear said segment results also were impacted by last year's divestiture of its T&WA tire mounting business, which reported sales of $186 million in the second quarter of 2007.
Segment operating income for North America plummeted 54.7 percent to $24 million in the quarter, but first half earnings jumped 69.7 percent to $56 million. Goodyear said attempts to improve pricing, product mix and structural costs were offset by market weakness, higher inflation and costs related to plant modernizing and new plant employee training. However, the company said its increased pricing and product mix totaling $107 million countered raw material costs of $59 million for the period.