AKRON (April 28, 2010)—Goodyear returned to the black on an operating basis in the first quarter and reported 20.8-percent higher sales—reflecting economic recovery in all of the firm's operating segments—but was still in the red on a net basis.
“As markets around the world continue to improve, we are starting to see the benefits of the strategic actions we took last year, including our commitment to launch innovative new products during an economic downturn,” said President and CEO Richard Kramer. “The strategic actions contributed to strong growth in both sales and earnings, positioning us well as the global economy continues its recovery.”
Goodyear's segment operating income of $240 million contrasts with a $176 million loss a year ago. The net loss of $47 million was a marked improvement over the net loss of $333 million a year ago. Sales of $4.27 billion reflected double-digit gains in unit shipments and revenue in each of the firm's geographic regions.
The net result was dragged down by charges of $99 million to cover the devaluation of the Venezuelan bolivar fuerte in January, $5 million in costs related to a debt exchange offer and $5 million due to rationalizations, asset write-offs and accelerated depreciation, Goodyear said.
Offsetting these charges were gains of $8 million on asset sales, $8 million related to settlements with certain suppliers and $5 million from various discrete tax benefits.
In North America, Goodyear reported a segment operating loss of $14 million on 15-percent sales of $1.78 billion. The operating loss was an improvement over the $189 million loss of a year ago.
Unit sales volumes were up 9 percent to 15.2 million; OE volume jumped 45 percent while replacement shipments were up slightly.
The sales gain included $121 million in related sales—primarily sales of chemicals to third-party customers, Goodyear said.